Bet on These Biotech ETFs as Innovation Drives Market-Beating Growth

This dramatic outperformance has firmly placed the spotlight on biotech stocks and the exchange-traded funds (ETFs) that hold them, suggesting a golden opportunity for investors looking to gain exposure to this bullish industry. 

As we explore the specific drivers of this growth, it becomes clear why an entry into these funds now appears compelling. Let's examine the individual company innovations fueling this surge and how they translate into broader investment potential.

Breakthrough Innovations Driving Biotech

The current rally of the biotech industry is underpinned by tangible innovation and strong corporate performance. 

Amgen AMGN is a prime example, with its stock surging 35.2% year to date. This global leader in biologics was recognized on Fortune's 2026 list of America's Most Innovative Companies this April.  In May, Amgen announced plans to invest an additional $300 million in its U.S. manufacturing network to boost its U.S.-based production capacity, while it continues to advance key pipeline drugs like MariTide for obesity. 

Other prominent biotech stocks like Crinetics Pharmaceuticals CRNX and Halozyme Therapeutics (HALO) also deserve special mention when it comes to innovation. 

Crinetics Pharmaceuticals' lead commercial product, PALSONIFY, an oral medication approved to treat adults with acromegaly, launched in October last year, has been witnessing solid traction in recent times. Impressively, 385 unique healthcare providers (HCPs) prescribed PALSONIFY within the first three quarters of launch, whereas more than 70% of patients treated with PALSONIFY at the end of the second quarter of 2026 were on reimbursed therapy. The stock has skyrocketed 82% year to date. 

Halozyme Therapeutics' main revenue driver is ENHANZE, a proprietary drug delivery technology used to deliver blockbuster subcutaneous drugs. During the second quarter of 2026, HALO registered solid 48% year-over-year revenue growth, primarily driven by continued sales uptake of ENHANZE partner products. In May 2026, Halozyme and GSK plc entered into a global collaboration and license agreement for ENHANZE with multiple oncology targets, including the first potential application in antibody-drug conjugates. HALO has soared 59.9% so far this year.

Favorable Biotech Outlook Makes ETFs a Smart Play

Several powerful tailwinds suggest the biotech industry's positive momentum is set to continue over the long term.

In particular, the rise of more affordable and easy-to-administer oral obesity drugs is expected to expand this industry, with Goldman Sachs Research recently raising its 2030 global sales forecast for these drugs by 15% to $114 billion. 

Beyond obesity, significant potential lies in areas like cardiovascular disease, cancer and Alzheimer's, with key clinical data set to be released. Furthermore, merger and acquisition (M&A) activity is heating up as large-cap biopharma companies seek to acquire innovation to fill their pipelines, a trend that particularly benefits smaller and mid-cap biotech firms. 

Against this backdrop of robust, multi-therapeutic growth, picking singular stock winners exposes investor portfolios to severe binary regulatory and trial risks. Diversified biotech ETFs offer an ideal middle ground. They allow investors to capitalize on the sector's overarching growth trajectory while mitigating the volatility of individual clinical failures or sudden stock-specific regulatory hurdles.

Biotech ETFs to Buy

Considering the aforementioned discussion, investors may want to add the following biotech ETFs to their portfolios:

First Trust NYSE Arca Biotechnology ETF FBT

This fund, with net assets worth $2.95 billion, offers exposure to 30 leading biotechnology companies. HALO holds the first spot in this fund, with a 4.38% weight, while AMGN holds the fifth spot with a 3.73% weight. 

FBT has soared 31.6% year to date and charges 55 basis points (bps) in fees. It carries a Zacks ETF Rank #2 (Buy).

VanEck Biotech ETF BBH

This fund, with net assets worth $475 million, offers exposure to companies involved in the development and production, marketing and sales of drugs based on genetic analysis and diagnostic equipment. AMGN holds the first spot in this fund, with a 16.22% weight. 

BBH has surged 29% year to date and charges 35 bps in fees. It carries a Zacks ETF Rank #2.

Virtus Biotech ETF BBP

This fund, with net assets worth $108.8 million, offers exposure to biotechnology companies with at least one drug therapy approved by the FDA. CRNX holds the first spot in this fund, with a 3.07% weight, while HALO holds the seventh spot with a 1.88% weight. 

BBP has rallied 37.5% year to date and charges 34 bps in fees. It carries a Zacks ETF Rank #2. 

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