After a sweeping semi-annual rebalance, the biotech index underlying the ALPS Medical Breakthroughs ETF (SBIO) gained over 10% in just six trading days beginning June 18.
Key Takeaways:
- SBIO’s underlying index gained 10.01% in six trading days following its June 18 semi-annual rebalance.
- Thirty-seven companies were added and 15 removed, making it one of the index’s largest reconstitutions in recent memory.
- Apogee and Definium alone accounted for nearly 2.88 percentage points of the index’s 10.01% total gain.
SBIO tracks the S-Network Medical Breakthroughs Index, which requires holdings to have at least one drug candidate in Phase II or Phase III FDA clinical trials. Companies must also carry enough cash to keep operating for at least 24 months, a screen designed to filter out firms at risk of running out of funding before a trial concludes.
For investors tracking small-cap biotech through a fund like SBIO, the June reconstitution illustrates how quickly index rules can reshape a portfolio and drive outsized moves.
See more: Biotech ETFs Gain Momentum via AI Drug Discovery & Surging M&A
Thirty-seven companies entered the index and 15 departed on June 18, according to VettaFi data.
Departures included some of the index’s largest prior positions. Alkermes (ALKS) had carried a 4.75% weight, Kymera Therapeutics, Inc. (KYMR) sat at 4.67%, Spyre Therapeutics, Inc. (SYRE) at 4.39%, and Mirum Pharmaceuticals, Inc. (MIRM) at 4.09%, according to VettaFi data.
Among the 37 new additions, the largest initial positions went to Veradermics Inc. (MANE) at 2.43%, Dyne Therapeutics Inc. (DYN) at 2.03%, Definium Therapeutics Inc. (DFTX) at 1.66%, and Kailera Therapeutics Inc. (KLRA) at 1.6%, according to VettaFi.
Breaking Down the Biotech Index Gains
Apogee Therapeutics, Inc. (APGE), an existing holding, led all contributors during the six-day window. It carried the highest average weight in the index at 4.34%, climbed 46.8%, and contributed 1.68 percentage points to the total return, according to VettaFi data.
Two new additions also drove gains. Definium entered at a 1.66% weight on June 18 and surged 72.1% in six days, adding 1.2 percentage points to the return. Its average weight during the period rose to 2.09%, above its initial entry weight, as price gains pushed its market value higher within the index.
Veradermics, also added June 18, climbed nearly 25% from its 2.43% starting weight and contributed 0.59 percentage points, the data showed.
SBIO holds $170.4 million in assets and carries a 0.50% expense ratio, according to ETF Database.
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VettaFi LLC (“VettaFi”) is the index provider for SBIO, for which it receives an index licensing fee. However, SBIO is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of SBIO.
