GNOM - Biotech ETF XBI drops to an 8-month low

2023-03-23 08:56:52 ET

Popular biotech exchange traded fund SPDR S&P Biotech ETF ( NYSEARCA: XBI ) dropped more than 3% on Wednesday. As a result, the ETF reached a new 8-month low.

XBI touched $73.06 a share on Wednesday which marked its lowest level dating back to June 30 of 2022. The equal weight fund, designed to deliver access to large- and mid-cap stocks specific to biotech industry, has struggled in 2023.

The ETF has dropped by 10.3% so far this year, thanks in part to declines at some of its key holdings. These include Fate Therapeutics ( FATE ), Moderna ( MRNA ) and Catalyst Pharmaceuticals ( CPRX ), which each trade lower on the year by 49.3% , 17.2% , and 10.2% , respectively.

While XBI has declined in 2023, technical mean reversion investors may find it noteworthy that the fund now sits at oversold levels, according to the Relative Strength Index indicator. XBI’s RSI hovers at 28.6 which is below the traditional oversold marker of 30.

Meanwhile, Seeking Alpha’s Quant Ratings view XBI as a Strong Sell, giving the exchange traded fund factor grades of an F regarding its momentum and dividends. See quant grades below:

Biotech investors can look to other ETFs to provide an alternative to the XBI. Here are a few notable alternatives:

• ARK Genomic Revolution ETF ( ARKG )
• Global X Genomics & Biotechnology ETF ( GNOM )
• iShares Biotechnology ETF ( IBB )
• VanEck Biotech ETF ( BBH )

In other health care news, Moderna is collaborating with Generation Bio to develop non-viral genetic medicines.

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