June ETFs: Biotech Dominates, China Semiconductor ETF Rises

Biotechnology exchange-traded funds accounted for four of the five top-performing equity ETFs in June. The ARK Genomic Revolution ETF (ARKG) led the group with a 24.15% gain for the month. The KraneShares SSE STAR Market 50 Index ETF (KSTR) climbed 16.55% on strength in China’s AI infrastructure and semiconductor sectors.

Biotech gains coincided with wider use of artificial intelligence in early-stage research and increased merger-and-acquisition activity. Research firm PwC reported $65 billion in biotech M&A value in the first quarter of 2026. In June, AbbVie agreed to acquire Apogee Therapeutics for $10.9 billion.

ARKG is an actively managed fund that targets companies in DNA sequencing, gene editing, therapeutics and molecular diagnostics. The Virtus Biotech Clinical Trials ETF (BBC) returned 20.25% in June; it tracks the LifeSci Biotechnology Clinical Trials Index, which includes U.S. biotech firms whose lead drug candidates are in clinical trial phases 1 through 3 and lack FDA marketing approval. The ALPS Medical Breakthroughs ETF (SBIO) rose 19.15% and follows the S-Network Medical Breakthroughs Index, which requires holdings to have at least one drug in phase 2 or 3 trials and sufficient cash for two years of operations. After SBIO’s semi-annual rebalance, its underlying index gained more than 10% in six trading days; the reconstitution added 37 companies and removed 15. The State Street SPDR S&P Biotech ETF (XBI) returned 16.53% and provides equal-weighted exposure across biotech market capitalizations.

KSTR tracks the SSE Science and Technology Innovation Board 50 Index, known as the STAR 50. About 70% of the index’s holdings are involved in semiconductors and AI infrastructure components. KSTR’s largest holding, Cambricon Technologies, carried a weighting near 9.85% and has received backing from state-supported investment funds. More than 50 technology and semiconductor companies recently filed to list in Chinese markets with estimated fundraising plans of at least $18.7 billion. Rising demand for high-bandwidth memory and DRAM for AI applications supported earnings for component suppliers.

Investors also responded to expectations that trade tensions and export restrictions could ease, which would reduce constraints on chip supply chains and influence flows into Chinese tech and semiconductor capacity.

Prior to 2026, the biotech sector had trailed broader markets for several years.