ALPS Medical Breakthroughs ETF (SBIO)

Overview

The ALPS Medical Breakthroughs ETF (SBIO) focuses on investing in small- and mid-cap biotechnology and pharmaceutical companies that have one or more drugs in Phase II or Phase III clinical trials. The ETF seeks to capitalize on the potential for innovation and breakthroughs in the medical sector.

Reputation and Reliability

ALPS Advisors is known for its thematic and sector-specific ETFs, with a generally solid reputation. They have a history of managing ETFs effectively, and are part of SS&C Technologies.

Management Expertise

ALPS Advisors has a team of experienced investment professionals who specialize in managing sector-focused ETFs. Their expertise in identifying promising companies within the medical and biotechnology sectors is crucial for SBIO's strategy.

Goal

To provide investment results that correspond generally to the performance of the Poliwogg Medical Breakthroughs Index.

Investment Approach and Strategy

Strategy: SBIO tracks the Poliwogg Medical Breakthroughs Index, which selects small- and mid-cap companies that have drugs in Phase II or Phase III clinical trials.

Composition The ETF primarily holds common stocks of companies in the biotechnology and pharmaceutical sectors, specifically those focused on medical breakthroughs. The portfolio is relatively concentrated in these sectors.

Market Share: SBIO's market share within the biotech ETF sector is moderate; it is not one of the largest but maintains a presence.

Total Net Assets (AUM): 230793080

Key Competitors

• iShares Biotechnology ETF (IBB)
• SPDR S&P Biotech ETF (XBI)
• ARK Genomic Revolution ETF (ARKG)

Competitive Landscape

The biotech ETF landscape is competitive, with IBB and XBI holding significant market share due to their broader focus and larger size. SBIO differentiates itself by focusing specifically on companies with drugs in Phase II or Phase III trials, which offers potential for higher growth but also carries greater risk. SBIO's niche focus can lead to more concentrated holdings compared to its broader competitors.

Historical Performance: Historical performance data is best obtained from financial data providers. Please see disclaimers below.

Benchmark Comparison: Benchmark comparisons are best obtained from financial data providers. Please see disclaimers below.

Expense Ratio: 0.5

Average Trading Volume

SBIO's average trading volume is moderate, which may impact the ease of buying and selling shares.

Bid-Ask Spread

The bid-ask spread for SBIO is generally moderate but can widen during periods of market volatility or low trading volume.

Market Environment Factors

SBIO's performance is heavily influenced by factors such as FDA approvals, clinical trial outcomes, regulatory changes, and overall investor sentiment toward the biotechnology sector. Economic indicators have a lower impact compared to sector-specific events.

Growth Trajectory

SBIO's growth is tied to the success of its underlying companies' clinical trials and their ability to bring new drugs to market. Strategy and holdings can change based on rebalancing of the Poliwogg Medical Breakthroughs Index.

Competitive Edge

SBIO's competitive advantage lies in its targeted approach, focusing on companies with drugs in advanced clinical trial stages, which offers the potential for significant upside if these drugs are approved. This niche focus differentiates it from broader biotech ETFs. The index-tracking strategy provides transparency. However, this narrow focus also introduces greater risk and volatility compared to more diversified competitors.

Volatility

SBIO is expected to exhibit higher volatility due to its concentration in small- and mid-cap biotech companies and the inherent uncertainty of clinical trial outcomes.

Market Risk

The specific risks associated with SBIO include clinical trial failures, regulatory setbacks, competition from other pharmaceutical companies, and changes in healthcare policies.

Ideal Investor Profile

The ideal investor for SBIO is one who is comfortable with high risk, has a long-term investment horizon, and is seeking exposure to the potential upside of medical breakthroughs. Investors should be knowledgeable about the biotechnology sector and understand the risks involved in investing in companies with drugs in clinical trials.

Market Risk

SBIO is more suitable for long-term investors who can tolerate significant volatility and are willing to accept the risk of clinical trial failures. It is less suitable for risk-averse investors or those seeking stable returns.

The ALPS Medical Breakthroughs ETF (SBIO) offers targeted exposure to small- and mid-cap biotech companies with drugs in late-stage clinical trials. Its focus on medical breakthroughs provides potential for high growth but also introduces significant risk and volatility. The ETF tracks the Poliwogg Medical Breakthroughs Index, aiming to replicate its performance. Due to its concentrated portfolio and sector-specific focus, SBIO is best suited for risk-tolerant investors with a long-term investment horizon. Before investing, one should consider the expense ratio of 0.50%.

Data Sources:

• ALPS Advisors Website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investment decisions should be based on your own research and consultation with a qualified financial advisor. Market share data is approximate and may vary depending on the source and methodology. Past performance is not indicative of future results. Financial data can change.