Junior Biotechnology ETF
IBBJ // Junior Biotechnology ETF
Why Invest in Junior Biotech?
- Junior biotech companies, with a market capitalization that is less than $5 billion, have the potential advantage of a Food and Drug Administration more receptive to new cutting-edge and rare-disease therapies. They are possibly also strengthened by increased patient lobbying and greater willingness by insurers to pay for treatments. Combined with the potential for mergers-and-acquisitions and the U.S. government’s recent gigantic Covid-19 aid to small and mid-sized companies, small-caps seemed likely to lead the domestic recovery.
- The value of the global pharmaceutical market rose from about US$390 billion in 2001, to about US$1.25 trillion at the end of 2019.1
- Whether for cancer research, or a vaccine or treatment for Covid-19, we believe the strong demand side continues to combine with government regulation and policies prioritizing these sectors.
- In uncertain and unpredictable times, biotechnology benchmarks have been known to beat the wider market.2
Why the Defiance Junior Biotech ETF?
- IBBJ offers the investor liquid, transparent and low-cost* access to junior companies that are classified as either biotechnology or pharmaceutical. The ETF can be traded intraday, providing flexible yet targeted exposure to a potentially growing sector.
- The underlying Nasdaq Junior Biotechnology Index tracks approximately 243 companies from over 16 countries.
- The Nasdaq Junior Biotechnology Index is a modified market capitalization weighted index that tracks the performance of small-cap “junior” companies listed on the Nasdaq Stock Market® (Nasdaq®), which are under $5 billion of market capitalization. They must be classified as either biotechnology or pharmaceutical according to the Industry Classification Benchmark (ICB).
- These are companies engaged in biotech research and development, the sale or licensing of biological substances for the purposes of drug discovery and diagnostic development; and pharmaceutical manufacturers of prescription or over-the counter drugs, including vaccines and development and manufacturing companies.
1 “Revenue of the worldwide pharmaceutical market from 2001 to 2019,” Statista, https://www.statista.com/statistics/263102/pharmaceutical-market-worldwide-revenue-since-2001/
2 “Biotech ETFs in the Spotlight, Why They’ll Remain There,” Tom Lydon, ETF Trends, June 18, 2020, https://www.etftrends.com/etf-building-blocks-channel/biotech-etfs-in-the-spotlight-why-they-can-remain-there/
3 Diversification does not assure a profit, nor does it protect against a loss in a declining market.
* Commissions may be charged on trades.