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Is First Trust NYSE Arca Biotechnology ETF (FBT) a Strong ETF Right Now?
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The First Trust NYSE Arca Biotechnology ETF (FBT - Free Report) was launched on 06/19/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by First Trust Advisors, FBT has amassed assets over $1.33 billion, making it one of the larger ETFs in the Health Care ETFs. Before fees and expenses, this particular fund seeks to match the performance of the NYSE Arca Biotechnology Index.
The NYSE Arca Biotechnology Index is an equal dollar weighted index designed to measure the performance of a cross section of companies in the biotechnology industry that are primarily involved in the use of biological processes to develop products or provide services.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.54% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.00%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For FBT, it has heaviest allocation in the Healthcare sector --about 100% of the portfolio.
Looking at individual holdings, Exact Sciences Corporation (EXAS) accounts for about 4.95% of total assets, followed by Natera, Inc. (NTRA) and Illumina, Inc. (ILMN).
The top 10 holdings account for about 38.84% of total assets under management.
Performance and Risk
Year-to-date, the First Trust NYSE Arca Biotechnology ETF has gained about 0% so far, and was up about 24.25% over the last 12 months (as of 01/01/2026). FBT has traded between $145.67 $215.09 in this past 52-week period.
The ETF has a beta of 0.66 and standard deviation of 19.31% for the trailing three-year period, making it a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers .
Alternatives
First Trust NYSE Arca Biotechnology ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
State Street SPDR S&P Biotech ETF (XBI) tracks S&P Biotechnology Select Industry Index and the iShares Biotechnology ETF (IBB) tracks Nasdaq Biotechnology Index. State Street SPDR S&P Biotech ETF has $8.3 billion in assets, iShares Biotechnology ETF has $8.47 billion. XBI has an expense ratio of 0.35% and IBB changes 0.44%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Health Care ETFs
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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Is First Trust NYSE Arca Biotechnology ETF (FBT) a Strong ETF Right Now?
The First Trust NYSE Arca Biotechnology ETF (FBT - Free Report) was launched on 06/19/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by First Trust Advisors, FBT has amassed assets over $1.33 billion, making it one of the larger ETFs in the Health Care ETFs. Before fees and expenses, this particular fund seeks to match the performance of the NYSE Arca Biotechnology Index.
The NYSE Arca Biotechnology Index is an equal dollar weighted index designed to measure the performance of a cross section of companies in the biotechnology industry that are primarily involved in the use of biological processes to develop products or provide services.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.54% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.00%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For FBT, it has heaviest allocation in the Healthcare sector --about 100% of the portfolio.
Looking at individual holdings, Exact Sciences Corporation (EXAS) accounts for about 4.95% of total assets, followed by Natera, Inc. (NTRA) and Illumina, Inc. (ILMN).
The top 10 holdings account for about 38.84% of total assets under management.
Performance and Risk
Year-to-date, the First Trust NYSE Arca Biotechnology ETF has gained about 0% so far, and was up about 24.25% over the last 12 months (as of 01/01/2026). FBT has traded between $145.67 $215.09 in this past 52-week period.
The ETF has a beta of 0.66 and standard deviation of 19.31% for the trailing three-year period, making it a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers .
Alternatives
First Trust NYSE Arca Biotechnology ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
State Street SPDR S&P Biotech ETF (XBI) tracks S&P Biotechnology Select Industry Index and the iShares Biotechnology ETF (IBB) tracks Nasdaq Biotechnology Index. State Street SPDR S&P Biotech ETF has $8.3 billion in assets, iShares Biotechnology ETF has $8.47 billion. XBI has an expense ratio of 0.35% and IBB changes 0.44%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Health Care ETFs
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.