Top Life Science ETFs of 2020
What are the top life science ETFs? Here’s a look at the five best-performing life science ETFs of 2020.
Taking a position in a life science-focused exchange-traded fund (ETF) provides exposure to biotech and pharma companies while mitigating the risks of holding shares in a single company.
Life science ETFs achieve this diversification by tracking a basket of biotechnology stocks and pharmaceutical stocks in the healthcare sector under one umbrella. They often narrow down their focus even further to follow a specific aspect of the market, and they typically adjust the weight of their holdings to match movements in the industry and give investors the best possible returns.
There are many options when it comes to life science ETFs, and to help investors understand their options, the Investing News Network has listed the top-performing life science ETFs over the past year.
Data was gathered on January 4, 2021, and the 10 life science ETFs listed by ETFdb.com were considered. Read on to learn more about the top-performing life science ETFs of 2020.
1. ARK Genomic Revolution ETF (BATS:ARKG)
Yearly performance: +180.4 percent
The ARK Genomic Revolution ETF has 52 holdings and its total assets are valued at US$7.51 billion. The administrators of this actively managed fund aim to pick the companies best positioned to profit from advancements in energy, automation, manufacturing, materials and transportation.
This ETF is a popular option for investors interested in genetics, molecular diagnostics and stem cell advances. While the holdings of its nearest competitor, the iShares Genomics Immunology and Healthcare ETF (ARCA:IDNA), are dominated by major pharmaceutical companies, ARK’s top holdings include firms such as Pacific Biosciences of California (NASDAQ:PACB), Teladoc Health (NYSE:TDOC) and CRISPR Therapeutics (NASDAQ:CRSP).
2. SPDR S&P Biotech ETF (ARCA:XBI)
Yearly performance: +48.3 percent
The SPDR S&P Biotech ETF was created in 2006, and tracks common stocks in the biotech sector as well as pharma stocks. Its index dividend yield is low at 0.2 percent, and its total assets stand at US$6.94 billion. In the last five years, this ETF has had a 100.62 percent investment return.
With 172 holdings across various market cap sizes, some of the SPDR S&P Biotech ETF’s top holdings include Agios Pharmaceuticals (NASDAQ:AGIO), SAGE Therapuetics (NASDAQ:SAGE) and Alexion Pharmaceuticals (NASDAQ:ALXN).
3. iShares NASDAQ Biotechnology ETF (NASDAQ:IBB)
Yearly performance: +26 percent
The iShares NASDAQ Biotechnology ETF focuses on life science companies using biomedical research for new treatments or cures for human disease. Its top holdings are Amgen (NASDAQ:AMGN), Gilead Sciences (NASDAQ:GILD) and Vertex Pharmaceuticals (NASDAQ:VRTX).
With 286 holdings, this ETF’s total assets are US$10.44 billion. It is primarily focused on American companies, although it has exposure to some international firms. In the last five years, the fund has had an investment return of 34.8 percent for its shareholders.
4. iShares US Medical Devices ETF (ARCA:IHI)
Yearly performance: +24.2 percent
The iShares US Medical Devices ETF focuses on medical device companies, an often-overlooked segment of the life science market that has gained market size in recent years as advances in research and development have brought innovation to the forefront. Its top holdings are Abbott Laboratories (NYSE:ABT), Thermo Fisher Scientific (NYSE:TMO) and Medtronic (NYSE:MDT).
With 65 holdings, this ETF’s total assets are US$9.12 billion. In the last five years, it has brought a return of 169.73 percent for its shareholders.
5. Vanguard Health Care Index Fund ETF (ARCA:VHT)
Yearly performance: +18.29 percent
The Vanguard Health Care Index Fund ETF has the most holdings on this list at 455, including Johnson & Johnson (NYSE:JNJ), UnitedHealth Group (NYSE:UNH) and Pfizer (NYSE:PFE).
This is a broad fund with healthcare firms from varied industries in the market. The total assets for this ETF are US$13.06 billion. It has achieved a 79.87 percent increase for investors over the last five years.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.