SPDR® S&P Biotech ETF’s Process Pillar rating is Average, but a strong management team still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy earns an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a considerable overweight position in liquidity exposure and has a substantial underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Alpine Immune Sciences

ImmunityBio

Revolution Medicines

Moderna

Blueprint Medicines

Amgen

Crinetics Pharmaceuticals Inc

Twist Bioscience Corp

Natera

United Therapeutics

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. SPDR® S&P Biotech ETF earns an Average Process Pillar rating. The primary contributor to the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. 

The investment strategy as stated in the fund's prospectus is:  The investment 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 derived from the biotechnology segment of a U.S. total market composite index.  In seeking to track the performance of the S&P Biotechnology Select Industry Index (the "index"), the fund employs a sampling strategy. It generally invests substantially all, but at least 80%, and of its total assets in the securities comprising the index. The index represents the biotechnology segment of the S&P Total Market Index ("S&P TMI"). 

 The portfolio has allocations in its top two sectors, healthcare and energy, that are similar to the category. The sectors with low exposure compared to category peers are basic materials and technology; however, the allocations are similar to the category. The strategy owns 140 securities and its assets are more dispersed than peers in the category. In particular, 10.9% of the fund’s assets are concentrated in the top 10 fund holdings, as opposed to the category’s 41.0% average. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 65% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Average

Process

SPDR® S&P Biotech ETF benefits considerably from its equity team, earning it an Above Average People Pillar rating. There are two managers listed on the fund: Karl Schneider, Raymond Donofrio. Experience on the team is abundant, with 20 years of average portfolio management experience. Together, they manage a total of six strategies, with solid long-term prospects. The strategies average a Bronze asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Above Average

People

State Street Global Advisors is under new leadership but continues to move along the positive trajectory established by former leaders. SSGA maintains its Above Average Parent Pillar rating.
Cyrus Taraporevala, who oversaw much of SSGA’s recent transformation, retired from the CEO position in December 2022 and passed the baton to his successor, Yie-Hsin Hung. She inherited a business that’s become more disciplined with its fund lineup. Fees have come down, while product development remains focused on fixed-income and sustainability funds, and many of SSGA’s launches have echoed that intention.
The seeds that SSGA planted over the past several years have been bearing fruit. It built out a low-cost series of portfolio building-block ETFs in the U.S. bearing the “SPDR Portfolio” branding. SSGA launched these later than its industry rivals, so they aren’t as large. But they’re competitive, with solid management and low fees, which helped them consistently take in new money over the past several years.
SSGA continued to overhaul its ETF business in Europe with most of its recent fixed-income and sustainability fund launches. Many of these funds track indexes and charge relatively low fees. With operations in the U.S. and Europe standing on a firm foundation, SSGA will put more focus on its Asia-Pacific business—the smallest regional segment of its business.

Parent

SPDR S&P Biotech ETF

XBI tracks an equal-weighted index of US biotechnology stocks.

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As we examine the market environment, exchange traded fund investors can consider tactical sector and industry exposures to help better position portfolios for what’s ahead. “Sector dispersion has been elevated and remains above long-term averages, a potential benefit for sector rotation strategies,” Matthew Bartolini, Head of SPDR Americas Research, State Street Global Advisors, said in [.

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Biotech ETFs to Gain on Coronavirus Vaccine Progress

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Fidelity MSCI Information Technology Index ETF

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ProShares Short Dow30

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iShares Gold Trust

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IMARA

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News for SPDR S&P Biotech ETF ETF (XBI)