About XBI ETF
XBI provides exposure to one of the broadest portfolios among US biotech ETFs. Unlike other funds in this segment, XBI is a pure biotech play, with relatively small pharma overlap as we see it. It is one of a handful of biotech ETFs available, offering exposure to a corner of the market that can perform well during periods of consolidation and is capable of big jumps in the event of major drug approvals. The fund’s alternative take on the space earns it a place on our Opportunities List.
XBI tracks an equal-weighted index of US biotechnology stocks. It seeks to track a modified equal weighted index which provides the potential for unconcentrated industry exposure across large, mid and small cap stocks greatly reducing single-name risk and allowing investors to take strategic or tactical positions at a more targeted level than traditional sector based investing. This is also particularly important in the biotech space, where specific companies are capable of turning in big gains over short periods of time. This highly efficient fund, which charges less than competing funds, has a history of beating its index due to revenue from securities lending. It has attracted a large asset base and trades with excellent volume.
About the Fund Manager
State Street Corporation is an American financial services and bank holding company headquartered at One Lincoln Street in Boston with operations worldwide. State Street is ranked among the largest banks in the United States by assets. It is one of the largest asset management companies in the world with trillions under management.