Want to invest in small biotech ETFs? INN profiles five examples that life science investors may want to look into.
Thanks to exchange-traded funds (ETFs), investors don’t have to be tied to one specific stock. Biotech ETFs allow market participants to gain leverage in multiple biotech companies via one investment vehicle.
The life science sector can certainly be risky, and ETFs are a good way to enter more safely than by 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 biotech ETFs for investors to consider. They were selected using ETFdb.com and their total assets under management (AUM) were under US$100 million as of July 6, 2022. All other figures were also current as of that date.
1. ALPS Medical Breakthroughs ETF (ARCA:SBIO)
AUM: US$99.14 million
The ALPS Medical Breakthroughs ETF was launched in December 2014, and tracks 138 holdings focused on biotech companies with drugs in Phase II and Phase III of US Food and Drug Administration clinical trials. Of its holdings, the majority are US-listed firms with market caps between US$200 million and US$5 billion.
The top biotech stocks in this ETF are CRISPR Therapeutics (NASDAQ:CRSP) at 3.09 percent; Ionis Pharmaceuticals (NASDAQ:IONS) at a 3.03 percent weight; and Alkermes (NASDAQ:ALKS) with a 2.92 percent weightage.
2. ProShares Ultra Nasdaq Biotechnology ETF (NASDAQ:BIB)
AUM: US$96.01 million
This fund tracks biotech companies through the broad-based NASDAQ Biotechnology Index. ETF.com refers to it as a “a powerful tool for investors with a bullish short-term outlook for biotechnology or pharmaceuticals companies,” but not a good choice for those with a more buy-and-hold investment strategy.
There are 371 holdings in this biotechnology fund, which came to market in April 2010. Its top holdings include Vertex Pharmaceuticals (NASDAQ:VRTX), weighing 5.72 percent; Amgen (NASDAQ:AMGN) at a weight of 5.58 percent; and Gilead Sciences (NASDAQ:GILD), weighing 5.58 percent.
3. Principal Healthcare Innovators ETF (NASDAQ:BTEC)
AUM: US$56.36 million
The Principal Healthcare Innovators ETF tracks US-listed healthcare stocks with a focus on those researching and developing innovative medicines and therapies. This fund was first introduced to the market in August 2016 and invests at least 80 percent of its assets in mid- and small-cap companies.
There are 283 holdings in this biotechnology fund. Its top holdings are Seagen (NASDAQ:SGEN), weighing in at 4.53 percent; Alnylam Pharmaceuticals (NASDAQ:ALNY), weighing 3.29 percent; and BioMarin Pharmaceutical (NASDAQ:BMRN), weighing 3.25 percent.
4. iShares Evolved US Innovative Healthcare ETF (BATS:IEIH)
AUM: US$36.79 million
The iShares Evolved US Innovative Healthcare ETF tracks US-listed pharmaceutical and biotechnology companies with exposure to innovations in the healthcare sector. This BlackRock-issued (NYSE:BLK) fund is fairly new and invests at least 80 percent of its assets in large-, mid- and small-cap companies.
There are 266 holdings included in this biotechnology fund, which was launched in March 2018. Its top holdings are Johnson & Johnson (NYSE:JNJ), weighing 10.38 percent; Ely Lilly and Company (NYSE:LLY), weighing 7.32 percent; and AbbVie (NYSE:ABBV), weighing 6.42 percent.
5. Loncar Cancer Immunotherapy ETF (NASDAQ:CNCR)
AUM: US$24.04 million
The Loncar Cancer Immunotherapy ETF was launched in October 2015, and tracks 31 holdings focused on cancer therapies that use the body’s own immune system. Of its holdings, the majority are small caps in the clinical-stage biotech sector, with a handful of large-cap immunotherapy leaders.
The top biotech stocks in this ETF are Iovance Biotherapeutics (NASDAQ:IOVA) at 4.03 percent; Xencor (NASDAQ:XNCR) at a 3.92 percent weight; and Fate Therapeutics (NASDAQ:FATE) with a 3.74 percent weightage.
This is an updated version of an article originally published by the Investing News Network in 2015.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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