Thanks to exchange-traded funds (ETFs), investors don’t have to be tied to one specific stock. When it comes to biotech ETFs, they give sector participants exposure to many biotech companies via one vehicle.
ETFs are a popular choice as they allow investors to enter the market more safely compared to investing in standalone stocks. A key advantage is that even if one company in the ETF takes a hit, the impact will be less direct.
Below the Investing News Network takes a look at five small-cap biotech ETFs. The funds were selected using ETFdb.com, and only ETFs with total assets under management (AUM) under US$100 million as of May 26, 2026, were considered.
All figures for ETF AUMs and holdings were also current as of that date. Read on to learn more about these investment vehicles.
1. Virtus Biotech ETF (ARCA:BBP)
AUM: US$77.84 million
Expense ratio: 0.34 percent
The Virtus Biotech ETF tracks the LifeSci Biotechnology Products Index, focusing on US-listed biotech companies with at least one FDA-approved drug therapy. The ETF's name was changed from Virtus LifeSci Biotech Products ETF in February 2026.
Launched in December 2014 by Virtus Investment Partners, it provides targeted exposure to firms in the product stage, from startups to large players, through passive, equal-weighted holdings rebalanced semi-annually.
The Virtus Biotech ETF has 60 holdings in its portfolio. Its top holdings include ImmunityBio (NASDAQ:IBRX) at a weight of 4.93 percent, Iovance Biotherapeutics (NASDAQ:IOVA) at 3.01 percent and Axsome Therapeutics (NASDAQ:AXSM) at 2.56 percent.
2. Direxion Daily S&P Biotech Bear 3X Shares (ARCA:LABD)
AUM: US$74.58 million
Expense ratio: 1.07 percent
The Direxion Daily S&P Biotech Bear 3X Shares is designed to provide three times the daily return of the inverse of the S&P Biotechnology Select Industry Index, meaning that the ETF rises in value when the index falls and falls in value when the index rises.
Leveraged inverse ETFs are designed for short-term trading and are not suitable for holding long-term. They also carry a high degree of risk as they can be significantly affected by market volatility.
Unlike the other ETFs on this list, LABD achieves its investment objective through holding financial contracts such as futures rather than holding individual stocks.
3. ProShares Ultra NASDAQ Biotechnology ETF (NASDAQ:BIB)
AUM: US$71.6 million
Expense ratio: 0.95 percent
The ProShares Ultra NASDAQ Biotechnology ETF, launched in April 2010, is leveraged to offer twice daily long exposure to the broad-based NASDAQ Biotechnology Index, making it an ideal choice “for investors with a bullish short-term outlook for biotechnology or pharmaceutical companies.”
However, analysts also advise investors with a low risk tolerance or a buy-and-hold strategy against investing in this fund due to its unique nature.
Of the 255 holdings in this ETF, the top biotech stocks are Gilead Sciences (NASDAQ:GILD) at a 4.81 percent weight, as well as Vertex Pharmaceuticals (NASDAQ:VRTX) and Amgen (NASDAQ:AMGN), both at 4.66 percent. A US dollar cash position makes up a significant portion of its holdings at 28.95 percent.
4. Global X Genomics & Biotechnology ETF (NASDAQ:GNOM)
AUM: US$52.19 million
Expense ratio: 0.5 percent
The Global X Genomics & Biotechnology ETF tracks the Solactive Genomics Index, focusing on companies in fields related to genomic science, including those working in gene editing, genomic sequencing, genetic medicine, computational genomics and biotech.
The ETF holds 51 stocks, with about 93 percent in the pharmaceuticals, biotechnology and life sciences sector. As for the size of the companies in its portfolio, 47.25 percent are mid-cap stocks, 34.57 percent are large-cap and 14.69 percent are small-cap.
Its top three holdings are Guardant Health (NASDAQ:GH) at a weight of 5.44 percent, Illumina (NASDAQ:ILMN) at 4.58 percent and Legend Biotech Corporation (NASDAQ:LEGN) at 4.46 percent.
5. Tema Heart and Health ETF (NASDAQ:HRTS)
AUM: US$51.5 million
Expense ratio: 0.75 percent
Launched in November 2023, the Tema Heart and Health ETF tracks biotech stocks with a focus on diabetes, obesity and cardiovascular diseases. The fund was renamed in March 2025 from Tema Cardiovascular and Metabolic ETF, and again last June from the GLP-1 Obesity and Cardiometabolic ETF.
There are 46 holdings in this biotechnology fund, with about 87 percent being large-cap stocks and 10 percent mid-cap. About three-quarters of its holdings are based in the US.
This Tema ETF's top biotech holdings are Eli Lilly and Company (NYSE:LLY) at a 10.95 percent weight, Novo Nordisk (NYSE:NVO) at a 5.1 percent weight and Roche Holding (OTCQX:RHHBY,SWX:ROG) at 4.56 percent.
This is an updated version of an article originally published by the Investing News Network in 2015.
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Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
