VanEck Biotech ETF offers a concentrated portfolio of 26 holdings, while State Street SPDR S&P Biotech ETF provides broad exposure to 165 companies.
VanEck Biotech ETF has experienced lower volatility with a beta of 0.71 and a significantly shallower maximum drawdown than State Street SPDR S&P Biotech ETF over the last five years.
Both funds share an identical 0.35% expense ratio, but the State Street fund manages $10.1 billion in assets under management (AUM) compared to $500 million for the VanEck fund.
The VanEck Biotech ETF (NASDAQ:BBH) offers a concentrated play on industry giants, while the State Street SPDR S&P Biotech ETF (NYSEMKT:XBI) provides broad exposure across the biotechnology sector.
Investors seeking biotechnology exposure often choose between these two distinct strategies. The VanEck fund targets a narrow group of industry leaders, while the State Street fund provides broad exposure to 158 companies across the market-capitalization spectrum using a representative sampling technique.
| Metric | XBI | BBH |
|---|---|---|
| Issuer | SPDR | VanEck |
| Share price | $149.78 (as of 2026-10-15) | $246.49 (as of 2026-10-15) |
| Expense ratio | 0.35% | 0.35% |
| 1-yr return (as of Oct. 15, 2026) | 38.8% | 42.0% |
| Dividend yield | 0.4% | 0.4% |
| Beta | 0.86 | 0.71 |
| AUM | $10.3 billion | $0.48 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Both funds are priced competitively for the sector with matching 0.35% expense ratios. Their income profiles are also nearly identical, each offering a 0.4% yield, making the choice between them dependent on portfolio concentration rather than cost.
| Metric | XBI | BBH |
|---|---|---|
| Max drawdown (5 yr) | (53.2%) | (34.6%) |
| Growth of $1,000 over 5 years (total return) | $1,205 | $1,296 |
The VanEck fund tracks a concentrated portfolio of 26 companies involved in the research, manufacturing, and sale of medications derived from genetic insights. Its holdings consist entirely of Healthcare stocks, and its largest positions include Amgen (NASDAQ:AMGN) at 16.4%, Gilead Sciences (NASDAQ:GILD) at 14%, and Vertex Pharmaceuticals (NASDAQ:VRTX) at 7.94%. Launched in 2011. VanEck Biotech ETF has paid $0.96 per share over the trailing 12 months, which on its recent ~$246.49 share price works out to a 0.4% yield.
The State Street fund holds a much broader basket of 165 stocks, using a modified index tracking approach to cover the biotechnology industry. The portfolio is 99% Healthcare and 1% Financial Services, and its top holdings include Moderna (NASDAQ:MRNA) at 2.53%, Natera (NASDAQ:NTRA) at 1.88%, and Twist Bioscience (NASDAQ:TWST) at 1.79%. Launched in 2006. State Street SPDR S&P Biotech ETF has paid $0.54 per share over the trailing 12 months, which on its recent ~$149.78 share price works out to a 0.4% yield.
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When deciding between these two biotech ETFs, investors must consider where they believe the greatest opportunities lie in the industry. Both funds carry identical expense ratios and dividend yields, but their underlying holdings tell two very different stories.
VanEck Biotech ETF concentrates its portfolio in just a couple dozen companies, with established industry leaders like Amgen and Gilead Sciences accounting for nearly 30% of its holdings. These companies have existing revenue streams, established drug portfolios, and the financial resources to continue developing new treatments.
Meanwhile, State Street SPDR S&P Biotech ETF spreads its exposure across an array of companies, including smaller firms working to bring new drugs and treatments to market. While these companies carry greater risks tied to clinical trials, regulatory approvals, and financing, they also offer substantial upside if their treatments prove successful.
For long-term investors, State Street SPDR S&P Biotech ETF looks like the better buy. The biotechnology industry is constantly evolving, and predicting which companies will develop the next blockbuster treatment is no easy task. With broader exposure to emerging innovators, this ETF provides more opportunities to capture the industry's next big winners without relying too heavily on a limited group of companies.
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RJ Fulton has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amgen, Gilead Sciences, Moderna, Natera, Twist Bioscience, and Vertex Pharmaceuticals. The Motley Fool recommends SPDR Series Trust - SPDR S&P Biotech ETF. The Motley Fool has a disclosure policy.