Returns Spiking for This Rate-Sensitive ETF

On the lookout for an ETF that might respond particularly well to rate cuts? One rate-sensitive ETF to watch is seeing returns spike even before rate cuts arrive. With cuts potentially nearer than many market observers had previously thought, investors may be looking for a strategy poised to benefit. The ALPS Medical Breakthroughs ETF (SBIO) may stand out in that case given its recent performance and its approach.

See more: As Rate Cuts Near, OUSM Is Sending Key Buy Signal

SBIO has returned 15.2% over the last three months per YCharts. That stands out relative to its category return of 8.36%. It has outperformed its category per YCharts on a one-year and YTD basis, too.

The strategy charges 50 basis points (bps) for its approach. The rate-sensitive ETF tracks the S-Network Medical Breakthroughs Index. The index presents a market-cap-weighted group of U.S. biotech names with one or more drugs in Phase II or III FDA clinical trials. SBIO screens for sustainability, looking for firms with cash on hand to last two years. Additionally, the ETF looks for firms with market caps between $200 million and $5 billion.