ETF Trends
ETF Trends

Could it be time to invest in a biotech-focused exchange traded fund (ETF)? Some say this was supposed to be the biotech century, where innovation was to lead to efficient, sustainable energy and gene-based drugs were to replace chemical compounds. Smartcrops, resistant to disease and adverse weather, were to feed the world. So what happened? Jonathan Bernstein of ETFzone says advances in the industry have come slower than expected, meanwhile, biotech shares have languished and investor enthusiasm has turned to apathy. Could stem cell research and FDA reform give the sector a boost?

  • iShares Nasdaq Biotechnology (IBB) – up 3.0% year-to-date
  • SPDR S&P Biotech (XBI) – up 15.3% – There are 34 holdings in XBI, which are evenly weighted at about 3%. Three of the five top holdings are up considerable for the year: Biogen Idec (BIIB) 12%; Martek Biosciences (MATK) 20% and Digene Corp (DIGE) 28% 
  • First Trust Amex Biotechnology Index (FBT) – up 4.8%
  • Biotech HOLDRs (BBH) – down 7.8%; There are only 15 holdings in BBH and the two largest holdings are down for the year – Genetech (DNA) makes up 40% of the portfolio and is down 7% and Amgen (AMGN) makes up 21% of BBH and is down 19%.
  • PowerShares Dynamic Biotech & Genome (PBE) – up 6.1%

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.