ETFs, or exchange-traded funds, are a great way for investors to get involved in a market without investing in specific companies.
Essentially, ETFs are marketable securities that track an index, commodity, bonds or a group of assets. They’re a popular option in the biotech space, and with that in mind, Life Science Investing News has put together a list of five small biotech ETFs.
1. ALPS Medical Breakthroughs ETF (NYSEARCA:SBIO)
Current market cap: $147.17 million
Current share price: $24.54
The ALPS Medical Breakthrough ETF invests in US-listed companies operating in the biotech and pharmaceutical sectors. It focuses on small- to mid-cap companies with market caps between $200 million and $5 billion. The ETF endeavors to mirror the performance of the Poliwogg Medical Breakthroughs index, and invests in companies based on their weightings in the index.
2. BioShares Biotechnology Clinical Trials Fund (NASDAQ:BBC)
Current market cap: $20.05 million
Current share price: $18.14
The BioShares Biotechnology Clinical Trials Fund follows an equally weighted index of US-listed biotech companies with lead drug candidates currently in clinical trials. This ETF is certainly one of the riskier funds on the market, as drugs in clinical trials historically have a low success rate. However, with high risk can come high reward, and that may make this fund appealing to some investors.
3. BioShares Biotechnology Products Fund (NASDAQ:BBP)
Current market cap: $24.32 million
Current share price: $28.94
Similar to the BioShares Biotechnology Clinical Trials Fund, the BioShares Biotechnology Products Fund focuses on a very specific niche of biotech investing—the fund only invests in biotech companies whose lead products have already received approval from the FDA. This makes the fund slightly more conservative, appealing to risk-averse investors. The Fund seeks investment results that match the price and yield performance of the LifeSci Biotechnology Products index before expenses.
4. Direxion Daily S&P Biotech Bear 1X Shares (NYSEARCA:LABS)
Current market cap: $6.60 million
Current share price: $35.14
Direxion Daily S&P Biotech Bear 1X Shares is comprised of close to 100 stocks with an average market cap of $8.14 billion. Holdings include Sarepta Therapeutics (NASDAQ:SRPT), Ionis Pharmaceuticals (NASDAQ:IONS) and Bluebird Bio (NASDAQ:BLUE), to name a few. As of September 30, 2016, the companies included in the Index were from the healthcare sector.
5. Proshares UltraPro NASDAQ Biotechnology Fund (NASDAQ:UBIO)
Current market cap: $40.79 million
Current share price: $25.75
The ProShares UltraPro Nasdaq Biotechnology Fund seeks a daily return that corresponds to triple the daily performance of the NASDAQ Biotechnology index (NASDAQ:IBB). The index includes securities listed on NASDAQ that are classified as either biotechnology or pharmaceutical. The typical market cap for this index is higher than the others on the list, averaging out to $4.09 billion per company.
This is an updated version of an article first published on Life Science Investing News on December 17, 2015.
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Securities Disclosure: I, Pia Rivera, hold no direct investment interest in any company mentioned in this article.