5 Best Biotech ETFs To Buy

In this article, we discuss 5 best biotech ETFs to buy. If you want to read our discussion on the biotech industry, head directly to 11 Best Biotech ETFs To Buy. 

5. Virtus LifeSci Biotech Products ETF (NYSE:BBP)

5-Year Share Price Performance as of April 2: 21.63%

Virtus LifeSci Biotech Products ETF (NYSE:BBP) aims to mirror the performance of the LifeSci Biotechnology Products Index, which monitors biotechnology firms with at least one FDA-approved drug therapy, before accounting for fees and expenses. As of April 1, 2024, the fund owns $19.7 million in net assets, with an expense ratio of 0.79%. It is one of the best biotech ETFs to monitor. 

Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) is the largest holding of Virtus LifeSci Biotech Products ETF (NYSE:BBP). Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) is an American biopharmaceutical company that specializes in developing and commercializing innovative treatments for eye care. On February 27, the company reported a Q4 GAAP EPS of -$1.31 and a revenue of $13.08 million, exceeding Wall Street estimates by $0.01 and $7.16 million, respectively. 

According to Insider Monkey’s fourth quarter database, 18 hedge funds were long Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS), compared to 20 funds in the earlier quarter. 

4. Putnam BioRevolution ETF (NYSE:SYNB)

5-Year Share Price Performance as of April 2: 24.63%

Ranking 4th on our list of the best biotech ETFs is Putnam BioRevolution ETF (NYSE:SYNB). Putnam BioRevolution ETF (NYSE:SYNB) aims to achieve long-term capital growth by investing in a portfolio of 30-50 carefully selected stocks. As of March 31, 2024, the fund has net assets of $5.43 million, along with an expense ratio of 0.70%. Its portfolio consists of 35 stocks. Putnam BioRevolution ETF (NYSE:SYNB) is one of the best biotech ETFs to buy. 

Thermo Fisher Scientific Inc. (NYSE:TMO) is one of the top holdings of the Putnam BioRevolution ETF (NYSE:SYNB). Thermo Fisher Scientific Inc. (NYSE:TMO) is a global provider of life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and biopharma services. On February 21, Thermo Fisher Scientific Inc. (NYSE:TMO) declared a $0.39 per share quarterly dividend, an 11.4% increase from its prior dividend of $0.35. The dividend is payable on April 15, to shareholders on record as of March 15. 

According to Insider Monkey’s fourth quarter database, 111 hedge funds were bullish on Thermo Fisher Scientific Inc. (NYSE:TMO), compared to 109 funds in the prior quarter. 

Generation Investment Global Equity Strategy stated the following regarding Thermo Fisher Scientific Inc. (NYSE:TMO) in its fourth quarter 2023 investor letter:

“In each quarterly letter we share examples from the portfolio that bring our investment process to life. This quarter we focus on Thermo Fisher Scientific Inc. (NYSE:TMO), a provider of healthcare products.

In recent years advances have accelerated. The large-scale use of mRNA vaccines during the COVID pandemic – the first major application of these vaccines – is just one example. Similar advances in drug development have allowed medicines to be developed for hard-to-treat diseases like Alzheimer’s, as well as to treat and perhaps cure diseases that previously eluded treatment.

To push innovation forward, researchers need tools to ask the right questions, run experiments to test hypotheses and in turn draw insights. These tools encompass high-specification instruments, high-purity reagents, powerful software and a variety of specialized services. An ecosystem has developed of companies that specialize in providing these tools. We often think of them as providing the ‘picks-and-shovels’ to researchers who are mining for the gold once obscured by nature…” (Click here to read the full text)

3. VanEck Biotech ETF (NASDAQ:BBH)

5-Year Share Price Performance as of April 2: 25.65%

VanEck Biotech ETF (NASDAQ:BBH) aims to mirror the performance of the MVIS US Listed Biotech 25 Index. The index is designed to represent the performance of companies engaged in the development, production, marketing, and sales of drugs utilizing genetic analysis and diagnostic equipment. VanEck Biotech ETF (NASDAQ:BBH) is one of the best biotech ETFs to invest in. The fund was established on December 20, 2011. As of April 2, 2024, VanEck Biotech ETF (NASDAQ:BBH)’s net assets amounted to $439.53 million, and the fund featured an expense ratio of 0.35%. 

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is one of the top holdings of VanEck Biotech ETF (NASDAQ:BBH). Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is a biotechnology company primarily focused on developing and commercializing therapies for cystic fibrosis. On February 5, the company reported a Q4 non-GAAP EPS of $4.20 and a revenue of $2.52 billion, outperforming Wall Street estimates by $0.11 and $10 million, respectively. 

According to Insider Monkey’s fourth quarter database, 62 hedge funds were bullish on Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), compared to 57 funds in the last quarter. 

Aristotle Atlantic Core Equity Strategy stated the following regarding Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) in its fourth quarter 2023 investor letter:

“Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) develops drugs for treating cystic fibrosis, cancer, inflammatory bowel, autoimmune disease and neurological disorders. The biotechnology company has four commercial drugs used to treat cystic fibrosis. Vertex has other drugs in development, including additional cystic fibrosis treatments and medications addressing sickle cell disease, beta thalassemia, alpha-1 antitrypsin deficiency and pain.

Vertex is the global leader in treating cystic fibrosis and has additionally built a robust pipeline in several therapeutic areas. Late-stage studies in acute and neuropathic pain are expected to be another catalyst for the company. We believe Vertex’s valuation is attractive and at a discount relative to their 5-year historical average. Additionally, the company is well capitalized, with roughly $12.5 billion in net cash on its balance sheet.”

2. Tema Cardiovascular and Metabolic ETF (NASDAQ:HRTS)

5-Year Share Price Performance as of April 2: 25.70%

Tema Cardiovascular and Metabolic ETF (NASDAQ:HRTS) is an actively managed fund aimed at achieving long-term capital growth by investing in companies that are at the forefront of combating obesity and cardiometabolic diseases. The Tema Cardiovascular and Metabolic ETF (NASDAQ:HRTS) was launched on November 20, 2023. As of April 2, 2024, the fund had $59.2 million in assets under management, along with a net expense ratio of 0.75% and a portfolio of 45 stocks. It is one of the best biotech ETFs to buy. 

Eli Lilly and Company (NYSE:LLY) is one of the top holdings of the Tema Cardiovascular and Metabolic ETF (NASDAQ:HRTS). In Q4 2024, Eli Lilly and Company (NYSE:LLY) surpassed Wall Street expectations with strong financial results driven by sales of its new diabetes and weight loss treatments.

According to Insider Monkey’s fourth quarter database, 102 hedge funds were bullish on Eli Lilly and Company (NYSE:LLY), same as the prior quarter. 

Aristotle Atlantic Core Equity Strategy stated the following regarding Eli Lilly and Company (NYSE:LLY) in its fourth quarter 2023 investor letter:

“Eli Lilly and Company (NYSE:LLY) is a leading pharmaceutical company that develops diabetes, oncology, immunology and neuroscience medicines. The company generates over half of its revenue in the U.S. from its top-selling drugs Trulicity, Verzenio and Taltz. The company operates in a single business segment, Human pharmaceutical products.

Eli Lilly has a deep pipeline in treatment areas focused on metabolic disorders, oncology, immunology and central nervous system disorders. Currently, there are two phase three assets, Orforglipron, an oral GLP-1 and retatrutide, a triple incretin agonist, which have the potential to expand upon the potential success of Mounjaro. We believe that Mounjaro has the potential to commercialize beyond type 2 diabetes and obesity, potentially in the areas mentioned above of heart disease, sleep apnea, fatty liver disease and chronic kidney disease. We believe the premium valuation is supported by this outsized growth profile.”

1. Franklin Genomic Advancements ETF (BATS:HELX)

5-Year Share Price Performance as of April 2: 33.33%

Franklin Genomic Advancements ETF (BATS:HELX) ranks 1st on our list of the best biotech ETFs. It is an actively managed ETF that aims for capital appreciation by investing in companies involved in genomic-based technologies, targeting improved quality of life. It focuses on firms benefiting from or enabling advancements like DNA sequencing, gene editing, and personalized medicine. The fund was established on February 25, 2020, and its reference benchmark is the Russell 3000 Index. As of April 2, 2024, Franklin Genomic Advancements ETF (BATS:HELX) owns $9.62 million in net assets, and the fund features an expense ratio of 0.50%. Its portfolio consists of 65 stocks. 

Medpace Holdings, Inc. (NASDAQ:MEDP) occupies the top position in Franklin Genomic Advancements ETF (BATS:HELX)’s portfolio. Medpace Holdings, Inc. (NASDAQ:MEDP) offers clinical research-based drug and medical device development services globally. On February 12, the company reported a Q4 GAAP EPS of $2.46 and a revenue of $498.4 million, outperforming Wall Street estimates by $0.24 and $0.63 million, respectively. 

According to Insider Monkey’s fourth quarter database, 38 hedge funds were bullish on Medpace Holdings, Inc. (NASDAQ:MEDP), compared to 36 funds in the last quarter. 

ClearBridge SMID Cap Growth Strategy stated the following regarding Medpace Holdings, Inc. (NASDAQ:MEDP) in its fourth quarter 2023 investor letter:

“We used the fourth quarter as a period of reflection and evaluation, eliminating positions where we felt our thesis was weakening while adding to new and existing holdings we felt were positioned well for years to come. Ultimately, this resulted in us initiating four new positions and exiting four others.

We also initiated a new position in Medpace Holdings, Inc. (NASDAQ:MEDP), in the health care sector, which provides clinical research-based drug and medical device development services. Medpace is a full service, one-stop shop for emergent biotech customers, and the company’s specific customer focus should allow it to continue to capture and grow market share within the industry.”

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