When the top four sector exchange traded funds on a year-to-date basis and six of the top 10 are biotechnology funds, talking about breakouts may seem a bit redundant, but that is exactly what the group did on Thursday.
Yesterday, 16 healthcare ETFs made 52-week or all-time highs and of that group, six were dedicated biotech funds, including the iShares Nasdaq Biotechnology ETF (NasdaqGS: IBB). Home to almost $9 billion in assets under management, IBB is the largest biotech ETF by assets.
Speaking of biotech ETF heft, the group at large has been packing on assets throughout 2015 and this month, indicating some investors were not caught off guard by Thursday’s biotech ETF rally. Through June 17, three of the five largest biotech ETFs saw inflows this month with departures from the two that lost assets totaling just $12.8 million. [Biotech ETFs for the Long Term]
That sum is less than a quarter of the $55.1 million hauled in this month by the First Trust NYSE Arca Biotechnology Index Fund (NYSEArca: FBT), the second-largest biotech ETF and one of the best-performing ETFs of any stripe since the March 2009 market bottom. [ETFs for Biotechs Loved by Hedge Funds]
Investors have allocated nearly $166 million to IBB this month and more than $107 million to the SPDR S&P Biotech ETF (NYSEArca: XBI), the third-largest biotech ETF by assets. With a gain of equal-weight XBI is this year’s third-best sector ETF with a gain of 35%, trailing only a pair of rookie biotech ETFs – the ALPS Medical Breakthroughs ETF (NYSEArca: SBIO) and the BioShares Biotechnology Products Fund (NasdaqGM: BBP).
SBIO and BBP, both of which debuted in December, are up an average of 38% this year. BBC recently increased its lineup to 39 from 33 stocks. BBP tracks 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. [New Breed Biotech ETFs]
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. Investors have allocated $13.7 million to the ETF this month. While that may not sound like much relative to the inflows to older biotech ETFs, remember that SBIO is not yet six months old and $13.7 million represents about 15% of the ETF’s assets under management tally.
SPDR S&P Biotech ETF