Launched on February 5, 2001, the iShares Biotechnology ETF (IBB) is a passively managed exchange traded fund designed to provide a broad exposure to the Healthcare - Biotech segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Healthcare - Biotech is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $8.6 billion, making it one of the largest ETFs attempting to match the performance of the Healthcare - Biotech segment of the equity market. IBB seeks to match the performance of the Nasdaq Biotechnology Index before fees and expenses.
The ICE Biotechnology Index contains securities of NASDAQ listed companies that are classified as either biotechnology or pharmaceuticals.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.44%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.16%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector -- about 100% of the portfolio.
Looking at individual holdings, Amgen Inc (AMGN) accounts for about 7.83% of total assets, followed by Vertex Pharmaceuticals Inc (VRTX) and Gilead Sciences Inc (GILD).
The top 10 holdings account for about 48.98% of total assets under management.
Performance and Risk
So far this year, IBB has added roughly 28.3%, and was up about 23.26% in the last one year (as of 12/15/2025). During this past 52-week period, the fund has traded between $112.02 and $173.83.
The ETF has a beta of 0.76 and standard deviation of 19.04% for the trailing three-year period, making it a high risk choice in the space. With about 253 holdings, it effectively diversifies company-specific risk.
Alternatives
iShares Biotechnology ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IBB is a good option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.
First Trust NYSE Arca Biotechnology ETF (FBT) tracks NYSE Arca Biotechnology Index and the State Street SPDR S&P Biotech ETF (XBI) tracks S&P Biotechnology Select Industry Index. First Trust NYSE Arca Biotechnology ETF has $1.33 billion in assets, State Street SPDR S&P Biotech ETF has $8.04 billion. FBT has an expense ratio of 0.54%, and XBI charges 0.35%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares Biotechnology ETF (IBB): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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