ALPS Medical Breakthroughs ETF

ALPS Medical Breakthroughs ETF (SBIO) is an index fund that holds small and mid-sized biotech companies with at least one drug in Phase II or Phase III FDA clinical trials. It drops companies that lack enough cash to cover at least 24 months of spending, and no single stock can be more than 4.5% of the index. Its 0.50% expense ratio is close to the 0.52% peer average but above the 0.35% charged by the larger SPDR S&P Biotech ETF (XBI).

• Over the year to Oct 27, 2026, SBIO returned +25.0%, 4th of 6 among similar funds.
• Its 5-year annualized return was +5.0% and its 10-year +10.4%.
• In the 2020 COVID crash it fell 37.6% and regained its old high 2.2 months after the low.
• Its worst full calendar year was 2022 (-28.1%); its best was 2025 (+55.1%).
• The deepest fall in its price history was 63.1% (Feb 8, 2021 to Oct 27, 2023), recovered by Jun 25, 2026.

As of May 31, 2026, the fund held 82 securities; the ten largest made up 34.8% of assets.

• Over the three months to May 31, 2026, investors added a net $17.5M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +1.30%, +2.58%, +1.42%.

SBIO is a passive fund run by ALPS Advisors. It tracks the S-Network Medical Breakthroughs Index (PMBI). To join the index, a biotech company needs at least one drug in a Phase II trial or a Phase III trial. A Phase II trial tests a drug on 100–300 people to see whether it works. A Phase III trial uses 500–3,000 people to confirm it works and to check side effects. The company must also be listed on a US exchange and be worth $200 million to $5 billion. Its shares must trade more than $1 million a day on average over the prior 90 days. It must also have enough cash to cover its monthly spending, called its cash burn, for at least 24 months. As of December 31, 2025, the index had 87 members.

Stocks are weighted by total market value, counting all shares outstanding rather than only the shares available to trade. No stock can be more than 4.5% of the index, and any excess is spread across the rest. The index adds and removes members twice a year, in June and December. It rebalances every quarter and is also reviewed on an ongoing basis. The fund normally keeps at least 80% of its assets in index stocks.

Because it follows an index, the fund will not sell a struggling company unless the index drops it. Portfolio turnover was 58%. As of May 31, 2026, the fund held 82 companies, and the top 10 made up 34.8% of assets.

• SBIO charges 0.5% a year, versus an average of 0.52% for the similar funds below (4th of 6, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $51 in the first year and $628 over 10 years (assuming a 5% annual return).

SBIO is a concentrated, volatile bet on small clinical-stage biotech companies that pays no income, so it may fit at most as a small side position.

SBIO gives exposure to small biotech companies whose fortunes often depend on clinical trial results. The fund launched at the end of 2014, so it has no record from the 2008 crisis. In the 2020 COVID crash it fell 37.6% in less than a month, but it was back at its peak by May 22, 2020. The 2022 bear market was harsher. The fund fell 44.9%, and it took about 40 months from its June 2022 low to recover. Its deepest decline was 63.1%, from February 2021 to October 2023, and it did not recover until June 2026. Its worst calendar year was 2022, a loss of about 28%.

Anyone who had to sell shares in a year like that would lock in steep losses. SBIO paid no distributions in the 12 months to October 27, 2026, so it provides no income. Its expense ratio is 0.50%. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).