Biotech ETFs: Which ETF Offers Lower Fees? IBBQ or XPH?

Jake Lerch, The Motley Fool

Thu, June 4, 2026 astatine 10:36 AM CDT 5 min read

Investors choosing betwixt Invesco Nasdaq Biotechnology ETF (NASDAQ:IBBQ) and State Street SPDR S&P Pharmaceuticals ETF (NYSEMKT:XPH) could measurement the little costs and broader diversification of IBBQ against the established size and pharmaceutical absorption of XPH.

Both funds connection targeted vulnerability to the healthcare sector, with a absorption connected research-intensive fields specified arsenic biotechnology and pharmaceuticals. While IBBQ tracks the Nasdaq Biotechnology Index, XPH provides modified equal-weighted vulnerability to the S&P Pharmaceuticals Select Industry Index. This examination evaluates however these 2 antithetic indexing strategies interaction costs, diversification, and semipermanent performance.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

The Invesco money maintains a wide outgo vantage with an disbursal ratio of 0.19%, which is astir fractional the 0.35% interest charged by the SPDR fund. Additionally, IBBQ provides a somewhat higher trailing-12-month dividend payout for yield-seeking investors.

Performance & hazard examination

What's wrong

State Street SPDR S&P Pharmaceuticals ETF (XPH) provides focused vulnerability to 58 pharmaceutical companies done a modified equal-weighted approach. Its largest positions see Corcept Therapeutics (NASDAQ:CORT) astatine 4.00%, Organon (NYSE:OGN) astatine 3.97%, and Liquidia (NASDAQ:LQDA) astatine 2.71%. This money launched successful 2006 and has a trailing-12-month dividend of $0.37 per share. It seeks to way the pharmaceutical sub-industry of the S&P Total Market Index, allowing investors to instrumentality strategical positions astatine a much targeted level than accepted wide healthcare assemblage investing.

In contrast, Invesco Nasdaq Biotechnology ETF (IBBQ) offers a overmuch broader scope with 255 holdings and launched successful 2021. Its largest positions see Gilead Sciences (NASDAQ:GILD) astatine 7.38%, Vertex Pharmaceuticals (NASDAQ:VRTX) astatine 7.37%, and Amgen (NASDAQ:AMGN) astatine 7.28%. This money paid $0.25 per stock implicit the trailing 12 months. While some ETFs are 100% concentrated successful the healthcare sector, IBBQ targets the Nasdaq Biotechnology Index, which includes some biotechnology and pharmaceutical firms listed connected the Nasdaq Stock Market.