Presenting a Pure Play on the Booming Biotech Industry

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

This article is the fourth in a series exploring equal-weight ETFs

The SPDR S&P Biotech ETF (NYSEARCA:XBI) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Biotechnology Select Industry Index.

The exchange-traded fund (ETF) seeks to provide exposure to the Biotechnology segment of the S&P TMI, which comprises Biotechnology sub-industries that combine to track a modified equal-weighted index. The ETF offers the potential for unconcentrated industry exposure across large-, mid- and small-cap stocks.

Since the fund equal-weights its portfolio, it in turn emphasizes small- and micro-caps and greatly reduces single-name risk. Thus, the weighted-average market cap is much smaller than some competitors’.

Unlike other funds in this segment, XBI is a pure biotech play, with relatively small pharma overlap. The index is rebalanced quarterly. Plus, the fund allows investors to take strategic or tactical positions at a more targeted level than traditional sector-based investing.

XBI trades around $124 a share and has a 0.24% dividend yield. It also has a 0.2% average spread, 189 holdings and a 0.35% expense ratio, meaning it is relatively inexpensive to hold in comparison to other exchange-traded funds.


Although XBI’s share price has been in a bit of a slump, this gives potential investors a great opportunity to buy shares in this hot ETF at a discounted price.

However, as with any opportunity, I urge all potential investors to exercise their own due diligence in deciding whether this fund fits their own individual portfolio goals.

Exclusive  Reaching Out and Communicating With This ETF
share on:

Like This Article?
Now Get Jim's FREE Special Report:
The Top 11 Dividend ETFs to
Buy Right Now

Get up to 5X the yields of traditional income plays.

Get Access to the Report, 100% FREE

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader

Used by financial advisors and individual investors all over the world, is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor