There are five major biotechnology exchange traded funds on the market today, each with its own nuances and spins on the high-flying industry.
The cap-weighted iShares Nasdaq Biotechnology ETF (NasdaqGS: IBB) is the largest biotech ETF. Investors can gain equal-weight exposure to the industry with the SPDR S&P Biotech ETF (NYSEArca: XBI), the second-largest biotech ETF by assets, while the PowerShares Dynamic Biotechnology & Genome Portfolio (NYSEArca: PBE) provides a strategic beta approach to biotech names. [Hot August for Biotech ETFs]
Two potential additions to the biotech ETF fray will offer even more refined approaches. Through turnkey ETF solutions firm ETF Issuer Solutions, the BioShares Biotechnology Products Fund and the BioShares Biotechnology Clinical Trials Fund could come to market.
According to a filing with the Securities and Exchange Commission, the issuer has selected tickers for the two ETFs and identified expense ratios, indicating launches could be imminent. The BioShares Biotechnology Clinical Trials Fund will trade under the ticker “BBC” while the BioShares Biotechnology Products Fund will trade with the ticker “BBP.” Both ETFs will charge 0.85% per year, assuming they come to market, according to the SEC filing.
Both funds will trade on the NASDAQ Stock Exchange.
BBC wil track the BioShares Biotechnology Clinical Trials Index, which is sponsored by LifeSci Index Partners, LLC.
The index excludes large pharmaceuticals companies as well as “medical devices and diagnostics; life science tools; specialty pharmaceuticals, generic drugs and outsourced drug delivery; healthcare services; contract research organizations; neutraceuticals; agricultural biotechnology; animal health; diversified healthcare; food sciences; information technology; and nanotechnology” firms, according to the filing.
Companies with a lead drug candidate in a Phase 1, Phase 2 or Phase 3 trial can be included in that index. The index had 104 constituents at the end of the second quarter.
BBP will track the BioShares Biotechnology Products Index, which is also sponsored by LifeSci Index Partners. That index follows U.S.-listed biotech companies with a primary product offering or product candidate that has landed FDA approval, according to the SEC filing. At the end of the second quarter, the index was home to 43 companies.
ETF Trends editorial team contributed to this post.