Biotech and pharmaceutical ETFs offer diverse investment strategies

Investors in the healthcare sector have several options for targeted exposure through exchange-traded funds (ETFs), ranging from broad biotechnology baskets to concentrated pharmaceutical holdings.

In the biotechnology space, the VanEck Biotech ETF (BBH) offers a concentrated approach by focusing on 25 leading companies, while the Invesco Nasdaq Biotechnology ETF (IBBQ) provides broader diversification across more than 250 stocks. The Invesco fund features a lower expense ratio of 0.19% compared to 0.35% for the VanEck fund.

For those seeking pharmaceutical exposure, the iShares U.S. Pharmaceuticals ETF (IHE) focuses on established industry leaders like Johnson & Johnson and Eli Lilly with an expense ratio of 0.37%. In contrast, the Invesco Biotechnology & Genome ETF (PBE) targets high-growth genetic engineering and biotech firms, though it carries a higher expense ratio of 0.58%.