Source launches biotech ETF

Nov 10th, 2014 | By | Category: Equities

Source, a leading provider of exchange-traded funds, has announced the launch of the Source Nasdaq Biotech UCITS ETF (SBIO), the first Europe-listed ETF to track the Nasdaq Biotechnology Index.

Source launches biotech ETF

Nasdaq Biotechnology Index Total Return (data as of 30th October 2014).

The biotechnology sector has seen remarkable growth from a handful of companies in the 1980s to a market capitalisation of over $950 billion today.

The Nasdaq Biotechnology Index reflects the performance of over 100 biotechnology and pharmaceuticals companies listed on the Nasdaq stock market. Constituents range from global giants with diverse portfolios to smaller companies focused on a single treatment.

Stocks are filtered to meet minimum market capitalisation and liquidity requirements and are then weighted on a modified market capitalisation basis: the largest five constituents are capped at 8%; the remaining constituents are capped at 4%.

As of 30 October 2014, the five largest constituents were Amgen, Celgene, Gilead Sciences, Regeneron Pharmaceuticals and Biogen Idec. The index is rebalanced quarterly and reviewed annually in December. The ETF aims to deliver the total return of this Index.

“Since the Nasdaq Biotechnology Index launched in 1993, it has evolved into a key industry benchmark for tracking the growth and performance of this increasingly important sector,” said Rob Hughes, head of index and advisor solutions at Nasdaq. “Nasdaq has been home to some of the world’s most innovative companies in the biotech sector and we are proud of our history and partnerships in this space.  We are excited to team with another innovator, Source.”

“Source is launching this product in direct response to investor demand,” added Source CEO Ted Hood. “While there are some large, actively managed biotech funds available to Europe investors, passive options are limited.  There are several ETFs, including our own, tracking the US Health Care sector, but we see many investors looking for more focused biotech exposure.”

The Source Nasdaq Biotech UCITS ETF is denominated in USD and trades on the London Stock Exchange. It has also been registered for sale in Austria, Finland, France, Germany, Ireland, Italy (for institutional investors only), Luxembourg, the Netherlands, Norway (for institutional investors only) and Sweden, and is also available for sale in Switzerland (for institutional investors only).

The fund has an annual management fee of 0.40%.

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