Cap-Weighting Critical When Indexing Biotech
January 25, 2022 at 16:07 PM EST
The biotechnology industry is a bifurcated space. In one corner, you have nascent, small-cap companies that don’t yet have steady revenue streams because their new drug or treatment is still in development, hasn’t received FDA approval, or hasn’t been in the market long enough to establish a proven track record. In the other corner, you have the large-cap companies with established reputations and steady revenue streams. The former group is speculative, while the latter is more stable.