$XBI, the SPDR S&P Biotech ETF, has faced notable challenges in 2025, with a year-to-date performance down 4% and negative returns over the past five years. Analysts have highlighted that without a recent rebalance, the ETF could have been trading down by as much as 50%. The rebalance has shifted the index to be more weighted towards larger biotech companies, removing many underperforming smaller firms. This shift has led to criticism regarding the index's failure to capture the struggles of early-stage biotech companies, which have been a significant source of pain for specialist funds. Since 2024, biotech-related catalysts such as data releases, mergers and acquisitions, and approvals have created approximately $92 billion in value. However, the overall index remains weak, with many larger pharmaceutical companies outperforming the biotech sector.