XBI: Underperformance Of Small Cap Biotech Likely To Continue

Mar. 25, 2023 8:41 AM ETSPDR® S&P Biotech ETF (XBI)IBB, XBI16 Comments

Summary

  • XBI sits 58% below its all-time high. Yet I still don't think it is a good investment here.
  • There are too many risk factors for the smaller biotech stocks this ETF owns, and tighter lending conditions will only complicate things.
  • I rate XBI ETF a Sell.
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By Rob Isbitts

SPDR S&P Biotech ETF (NYSEARCA:XBI) is likely in the early to mid stages of a period of underperformance, both versus its larger-cap peers and the broad US stock market. While this ETF allocates assets in an equal-weighted fashion

This article was written by

I'm Rob Isbitts, founder of Sungarden Investment Publishing. I run the new investing group Sungarden Investors Club, a community dedicated to navigating the modern investment climate with humility, discipline, and a non-traditional approach to income investing. I've been charting investments since the 1980s, and I spent decades an an investment advisor and fund manager before semi-retiring in 2020. Now, this investing group is my focus. The markets tells us a story…we just have to listen! I teach subscribers how to do that.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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