Two Ways to Play Biotech: FBT’s Return Edge vs. IBB’s Cost Advantage

The First Trust NYSE Arca Biotechnology Index Fund (NYSEMKT:FBT) offers a concentrated, equal-weighted approach to biotechnology, while the iShares Biotechnology ETF (NASDAQ:IBB) provides broad-market exposure with significantly more holdings.

Both funds serve as primary vehicles for investors seeking targeted exposure to the high-growth healthcare and biotechnology sectors. While they share a 100% sector focus on healthcare, their underlying benchmarks lead to distinct differences in risk profiles, asset concentrations, and management costs that may influence which fits better in a long-term investment portfolio. Investors often look to these funds to avoid the high risk of holding individual biotech stocks.

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.

Continue reading