BlackRock has listed a distributing share class on the London Stock Exchange for its recently launched iShares Nasdaq US Biotechnology UCITS ETF. The distributing share class has the ticker BTEE LN and will appeal to investors seeking regular income from the sector.
iShares has listed a distributing share class in London for its US Biotech ETF.
The ETF tracks the Nasdaq Biotechnology Index, which comprises stocks listed on the Nasdaq Exchange that operate within the biotechnology space as determined by the Industry Classification Benchmark.
Eligible companies must have a market capitalization greater than $200 million and an average daily trading volume of at least 100,000 shares.
Index constituents are weighted via a modified market capitalization weighting methodology, which caps an individual security at 8% and limits the number of constituents to reach this cap to five.
The excess weight of any capped constituent is distributed pro rata across the remaining index securities. The ETF currently has 194 underlying securities, with its largest holdings in Celgene Corp (7.9%), Amgen (7.8%), Gilead Sciences (7.7%) and Biogen (7.5%).
The US biotechnology sector has underperformed the broader US market since this time last year, with the index returning 9.0% compared to the S&P Index’s 12.9%. So far in 2018, however, the Nasdaq Biotechnology Index has fared better, returning 2.8% versus the S&P 500’s 0.7%.
Like the accumulating share class, the distributing share class has a total expense ratio (TER) of 0.35%. The accumulating share class was launched in November last year with simultaneous listings on the LSE (BTEK LN) and Deutsche Börse (2B70 GR).
BlackRock offers a US-listed version of the fund – the iShares Nasdaq Biotechnology ETF (IBB US) – which has traded on the Nasdaq Exchange since February 2001. As of writing, IBB holds over $9.4 billion in assets under management (AUM) and has a TER of 0.47%.
This US listed fund has a 12-month trailing dividend yield of 0.30%, which provides some guidance to the level of dividend investors in the new LSE-listed distributing ETF can expect.
As for similar ETFs, the Source Nasdaq Biotech UCITS ETF (SBIO LN) tracks the the same index as the iShares product and currently holds $495 million in AUM. It has a slightly higher TER of 0.40% but is an accumulating fund.