Although XBI “boasts just 58 holdings, it provides much more exposure (55%) to smaller- and micro-cap names. In contrast, large-cap holdings only make up about 14% of the fund’s investments,” according to Lou Basenese.
Remember that a primary disadvantage of cap-weighted ETFs is that they are often over-allocated to expensive stocks and under-allocated to inexpensive names. IBB has a P/E ratio of 35.27 and a price-to-book ratio over nine. XBI’s P/E is 27 with a price-to-book ratio of seven, according to State Street data.
SPDR S&P Bitoech ETF
ETF Trends editorial team contributed to this post.