The Best Life Sciences ETFs of 2024: Performance Rankings & Comparison Guide

Investing in life sciences ETF products offers a strategic way to gain broad exposure to the healthcare and biotech sectors without concentrating risk in individual companies. Rather than betting on a single pharmaceutical or medical device manufacturer, these funds allow investors to diversify across dozens or hundreds of holdings while maintaining a focused investment thesis. As fund managers actively reweight these portfolios to track market developments in biotechnology, pharmaceuticals, and medical innovation, they create a dynamic vehicle for capturing sector-wide growth.

The landscape of life sciences ETF options has expanded significantly, with funds ranging from narrow biotech specialists to broad healthcare platforms. To help investors evaluate their choices, we analyzed the top performers based on 2024 data, examining factors including year-to-date returns, assets under management, expense ratios, and portfolio composition.

SPDR Biotech ETF (XBI): The Sector Leader

Year-end performance: 16.8% gain
Assets under management: $7.82 billion

Launched in 2006, the SPDR Biotech ETF remains one of the most established pure-play biotech vehicles, tracking the S&P Biotechnology Select Industry Index with exclusive focus on US-based companies. With a modest 0.35% expense ratio and a five-year return of 5.01%, this fund appeals to long-term biotech investors seeking lower fees.

The fund’s 144 holdings skew toward quality, with 76% concentrated in large and mid-cap names. Among its largest positions are biotechnology leaders Incyte, United Therapeutics, and Gilead Sciences. This life sciences ETF structure allows exposure to diverse sub-segments including immuno-oncology, gene therapy, and specialty pharma—all within a single ticker.

First Trust NYSE Arca Biotechnology Index Fund (FBT): Selective Biotech Exposure

Year-end performance: 13.1% gain
Assets under management: $1.21 billion

Also established in 2006, the First Trust NYSE Arca Biotechnology Index Fund tracks the Amex Biotechnology Index with a more selective approach. Housing just 31 holdings, it’s considerably more concentrated than most peers, emphasizing large-cap US biotech companies while maintaining minor exposure to European firms.

At 0.56% in annual fees, it sits at the midpoint of the cost spectrum for life sciences ETF products. Its five-year return of 6.71% reflects a growth-focused strategy, with top positions including Exelixis, Intra-Cellular Therapies, and Incyte. The narrower holding count makes it suitable for investors preferring a more curated biotech selection.

Vanguard Health Care Index Fund ETF (VHT): Broad-Based Healthcare Play

Year-end performance: 11.9% gain
Assets under management: $17.95 billion

Among all life sciences ETF offerings, Vanguard’s healthcare index fund stands as the broadest mandate, launched in 2004 to capture the entire healthcare ecosystem. With 414 holdings spanning pharmaceuticals, medical devices, healthcare services, and biotech, it functions as a complete healthcare sector proxy rather than a narrow subsector bet.

The fund’s exceptionally low 0.1% expense ratio makes it a cornerstone choice for cost-conscious investors, delivering an 11.07% five-year return. More than 86% of holdings are large-cap US companies, providing exposure to diversified leaders like Eli Lilly, UnitedHealth Group, and AbbVie. This life sciences ETF structure suits investors seeking maximum diversification within healthcare.

iShares US Medical Devices ETF (IHI): Medical Technology Focus

Year-end performance: 11.7% gain
Assets under management: $4.9 billion

Launched alongside many peers in 2006, the iShares US Medical Devices ETF carves out a distinct niche by focusing exclusively on medical device manufacturers. With an 8.27% five-year return and a 0.4% expense ratio, it captures the innovation cycle in surgical instruments, diagnostics, and implantable technologies.

This life sciences ETF’s portfolio is concentrated in large-cap leaders—89% of holdings—including Abbott Laboratories, Intuitive Surgical, and Stryker Corporation. The medical devices sector offers different growth dynamics than pharma or biotech, driven by aging demographics and procedural volume trends.

iShares US Healthcare ETF (IYH): Tactical Healthcare Allocation

Year-end performance: 11.7% gain
Assets under management: $3.36 billion

The oldest life sciences ETF on this list, launched in 2000, the iShares US Healthcare ETF provides broad healthcare sector exposure with 109 holdings dominated by large-cap names (94%). With an 11.12% five-year return and 0.39% fees, it delivers solid long-term performance at reasonable cost.

Industry observers note this fund works best as a tactical allocation tool for sector rotation strategies rather than a core buy-and-hold position. Its top holdings—Eli Lilly, UnitedHealth Group, and Johnson & Johnson—reflect the healthcare sector’s blue-chip nature.

Comparing Life Sciences ETF Strategies

The five funds presented above represent different investment philosophies. For pure biotech exposure, SPDR Biotech leads with highest performance but narrower focus. For diversified healthcare access, Vanguard’s offering dominates through breadth and cost efficiency. Medical device specialists may prefer iShares’ IHI for sector-specific positioning.

When selecting among life sciences ETF options, consider your fee sensitivity (ranging from 0.1% to 0.56%), your desired concentration level (from 31 to 414 holdings), and your investment horizon. Shorter-term traders might prioritize pure-play sectors like biotech, while long-term portfolios benefit from healthcare’s built-in stability through diversification.

The life sciences ETF category continues evolving as industry dynamics shift and new fund managers enter the space. Whichever vehicle you choose, ensure its fee structure and holdings align with your risk tolerance and growth objectives.

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Disclosure: This analysis contains no personal investment positions in any company mentioned and reflects analytical perspectives only.