Biotechnology exchange traded funds (ETFs) could be poised to deliver the goods as an aging population and demand for new treatments stokes growth in the sector.
A slew of factors are driving the sector these days, explains PR.com. They include:
- Increasing demand for biotechnology drugs with enhanced efficiency, safety and popularity.
- Revision of regulations and standards in favor of biotechnology drugs are encouraging more companies to invest in the field.
- An aging population and the prevalence of chronic and age-related illnesses.
Factors that could curtail the sector’s growth, however, include pressures to keep costs low, a lack of technical development and expertise – many companies need skilled medical professionals – and increasing health care spending in the United States.
Stephen Halpern for Blogging Stocks singles out Gilead Sciences (NASDAQ: GILD) as a standout in the sector, thanks to its global presence, strong growth rate in the previous quarter, improving sales and the fact that it’s undervalued in the industry.
Scott Ruben for Benzinga notes that many other biotech stocks are showing strong revenue growth and have reasonable valuations, too. [Biotech ETFs: 5 Ways to Play Innovation.]
There are several ways to play biotechnology – find them all in the ETF Analyzer!
- iShares Nasdaq Biotechnology ETF (NASDAQ: IBB): Gilead is 6.1%
- SPDR S&P Biotech ETF (NYSEArca: XBI): Gilead is 3.9%
- First Trust NYSE Arca Biotech ETF (NYSEArca: FBT): Gilead is 5.3%
- ProShares Ultra Nasdaq Biotechnology (NASDAQ: BIB)
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.