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The best-performing ETF has a winning strategy, but just $29M

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Size doesn’t matter for one ETF that’s beating the competition.

A fund with just $29 million was the star performer in the $4 trillion U.S. market last month, returning more than any other unleveraged ETF, data compiled by Bloomberg show. The Virtus LifeSci Biotech Clinical Trials fund (BBC) gained 22%, beating more than 1,970 rivals.

The fund benefited from a busy month for biotech companies. While Novartis’s $9.7 billion takeover of Medicines boosted overall sentiment, stakes in ChemoCentryx and Karyopharm Therapeutics helped BBC outperform. ChemoCentry’s shares soared on positive data regarding a drug to treat an inflammation disease, while Karyopharm reported better-than-expected sales.

“Fundamentals in biotech stay strong and insulated from trade discussions making it an appealing place to invest,” said Maury Raycroft, an analyst at Jefferies. Clinical trials, M&A activity, and a favorable regulatory environment are all helping to foster a positive outlook, he said.

BBC’s returns exceeded the S&P 500 by 18% last month.

With an average gain of nearly 40%, the following mutual funds and ETFs are narrowly invested in the most attractive segments of the market.
November 6

Eight of November’s top 10 performing ETFs focused on biotechnology, or a related theme. The $4.3 billion SPDR S&P Biotech ETF (XBI) was the biggest of these funds, and returned almost 15%. — Additional reporting by Bailey Lipschultz

Bloomberg News