Biotech Hedge Funds are hot, but Biotech ETFs are Hotter

According to ETF Replay data, five-year CAGRs for the aforementioned biotech ETFs range from 26.5% to 35.5% for an average of 31.8%.

The theme of biotech ETFs outpacing hedge fund counterparts is continuing in 2015. A list of “big winners” among biotech/healthcare hedge funds featured by CNBC includes end of March and end of April returns ranging from 11.8% to 22%.

However, XBI has surged 27% this year as has the BioShares Biotechnology Clinical Trials Fund (NasdaqGM: BBC). BBC, one of the newer biotech ETFs on the market, focuses on companies with a lead drug candidate in a Phase 1, Phase 2 or Phase 3 trial. The ALPS Medical Breakthroughs ETF (NYSEArca: SBIO), which focuses on small- and mid-cap companies that have one or more drugs in either Phase II or Phase III U.S. FDA clinical trials, is up almost 36%.

CAGR of Five Largest Biotech ETFs

Chart Courtesy: ETF Replay