Biotech ETFs Gain Edge as Policy Risks Ease and M&A Activity Grows

The iShares Global Healthcare ETF (IXJ) provides exposure to 110 global healthcare companies, including Eli Lilly, Johnson & Johnson and AbbVie, and carries a 0.40% expense ratio. By contrast, the First Trust NYSE Arca Biotechnology Index Fund (FBT) is more concentrated with 30 holdings such as BeOne Medicines, Veracyte and NeoGenomics and has a higher 0.55% fee. IXJ offers broader diversification and lower cost, while FBT offers a more focused biotech bet with higher growth potential.

Analysts have initiated Buy ratings on the SPDR S&P Biotech ETF (XBI) and the iShares Biotechnology ETF (IBB) for 2026–2027, citing robust M&A activity, positive clinical data, and a narrower-than‑feared drug‑pricing policy risk. XBI is highlighted for greater upside, whereas IBB is noted for strong cash generation and solid balance‑sheet strength.