ETF Securities launches US biotech ETF on ASX

Nov 12th, 2018 | By | Category: Equities

ETF Securities Australia has launched the ETFS S&P Biotech ETF (CURE AU) on Australian Securities Exchange, providing exposure to the US biotechnology stocks.

ETFS US Biotechnology ETF

The US biotechnology sector has historically shown significantly greater volatility compared to the broader S&P 500 Index.

The underlying reference for the fund is the equally weighted S&P Biotechnology Select Industry Index.

The index includes stocks with market capitalizations greater than $500m that are assigned to the biotechnology sub-industry group of the US healthcare sector, as defined by the Global Industry Classification Standard.

There are currently 124 stocks in the index.

The equal weighting approach increases portfolio diversification and means that smaller and mid-cap stocks receive a relatively higher weight compared to market cap indices.

And by allocating to all stocks equally, it has the advantage of ensuring that investors participate fully in the winners.

The index has performed well historically, but investors should note that the group has exhibited significantly higher volatility than the broader US equity market.

As of the end of October 2018, the index has displayed an annualized standard deviation of 27.7% over the past ten years compared to 13.5% for the S&P 500.

ETFS Biotechnology ETF performance

Source: S&P Dow Jones Indices.

The fund comes with a management fee of 0.45%.

Distributions are sent to investors on an annual basis and currency exposure between USD and AUD is left unhedged.

It become the first ETF on ASX to explicitly target the US biotechnology sector.

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