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Biotech’s ETF tops the week’s winners

Oksana Patron11 August 2022
Hand stopping domino blocks from knocking down

The ETFS S&P Biotech ETF was the top performer for the last week as the sector turned the corner after a rough 12 months and helped by big pharma’s cash piles, ETF Securities’s head of product management and development, Evan Metcalf, said in a weekly update.

According to analysts, the biotech sector could see the cash being spent to acquire smaller firms from across the sector as valuations remained further supressed.

The rest of high-performing of the exchange traded funds (ETFs) was made up of thematic and growth tech-focussed ETFs as traders were more dovish on global interest rate hikes in recent weeks and lower interest rate expectations rewarded companies with higher future cash flow expectations.

At the same time, energy and bitcoin ETFs (OOO, FUEL, EBTC and CBTC) were the poorest performers as US oil futures fell below US$90 a barrel last week for the first time since the Ukraine war, driven by Biden’s green energy stimulus package passing the senate and recession fears. B

Also, bitcoin did not recover from the “crypto winter” of the kind seen by other blockchain protocols such as Ethereum, Metcalf said.

All in all, the industry saw $457 million in reported inflows, with inflows into ETFs having increased in recent weeks, as the stock market started to recover. Core ETFs such as A200, NDQ and SFY won the bulk of weekly flows.
But there were $138 million in reported outflows, meaning the industry had a strong week of net inflows, where IOZ accounted for almost half of the total outflows by itself, suggesting an institutional seller.

“Trading volumes centred around the usual suspects. IOZ was the most heavily traded, reflecting the strong selling it received, likely from an institutional client,” Metcalf added.

 

 

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