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Is State Street SPDR S&P Biotech ETF (XBI) a Strong ETF Right Now?
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Making its debut on 01/31/2006, smart beta exchange traded fund State Street SPDR S&P Biotech ETF (XBI - Free Report) provides investors broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by State Street Investment Management. XBI has been able to amass assets over $10.66 billion, making it one of the largest ETFs in the Health Care ETFs. This particular fund seeks to match the performance of the S&P Biotechnology Select Industry Index before fees and expenses.
The S&P Biotechnology Select Industry Index represents the biotechnology sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Biotech Index is a modified equal weight index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for XBI are 0.35%, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.35%.
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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Healthcare sector.
Looking at individual holdings, Moderna Inc (MRNA) accounts for about 2.93% of total assets, followed by Twist Bioscience Corp (TWST) and Halozyme Therapeutics Inc (HALO).
Its top 10 holdings account for approximately 15.51% of XBI's total assets under management.
Performance and Risk
Year-to-date, the State Street SPDR S&P Biotech ETF has added about 28.56% so far, and was up about 60.44% over the last 12 months (as of 09/29/2026). XBI has traded between $100.20 $169.55 in this past 52-week period.
XBI has a beta of 0.84 and standard deviation of 27.59% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 156 holdings, it effectively diversifies company-specific risk .
Alternatives
State Street SPDR S&P Biotech 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.
First Trust NYSE Arca Biotechnology ETF (FBT) tracks NYSE Arca Biotechnology Index and the iShares Biotechnology ETF (IBB) tracks Nasdaq Biotechnology Index. First Trust NYSE Arca Biotechnology ETF has $2.98 billion in assets, iShares Biotechnology ETF has $10.79 billion. FBT has an expense ratio of 0.55% 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 State Street SPDR S&P Biotech ETF (XBI) a Strong ETF Right Now?
Making its debut on 01/31/2006, smart beta exchange traded fund State Street SPDR S&P Biotech ETF (XBI - Free Report) provides investors broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by State Street Investment Management. XBI has been able to amass assets over $10.66 billion, making it one of the largest ETFs in the Health Care ETFs. This particular fund seeks to match the performance of the S&P Biotechnology Select Industry Index before fees and expenses.
The S&P Biotechnology Select Industry Index represents the biotechnology sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Biotech Index is a modified equal weight index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for XBI are 0.35%, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.35%.
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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Healthcare sector.
Looking at individual holdings, Moderna Inc (MRNA) accounts for about 2.93% of total assets, followed by Twist Bioscience Corp (TWST) and Halozyme Therapeutics Inc (HALO).
Its top 10 holdings account for approximately 15.51% of XBI's total assets under management.
Performance and Risk
Year-to-date, the State Street SPDR S&P Biotech ETF has added about 28.56% so far, and was up about 60.44% over the last 12 months (as of 09/29/2026). XBI has traded between $100.20 $169.55 in this past 52-week period.
XBI has a beta of 0.84 and standard deviation of 27.59% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 156 holdings, it effectively diversifies company-specific risk .
Alternatives
State Street SPDR S&P Biotech 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.
First Trust NYSE Arca Biotechnology ETF (FBT) tracks NYSE Arca Biotechnology Index and the iShares Biotechnology ETF (IBB) tracks Nasdaq Biotechnology Index. First Trust NYSE Arca Biotechnology ETF has $2.98 billion in assets, iShares Biotechnology ETF has $10.79 billion. FBT has an expense ratio of 0.55% 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.