ETF Trends
ETF Trends

Not many exchange traded funds (ETFs) outside those focused on commodities are perched above their 200-day moving averages. That makes it worth noting that two biotechnology ETFs crossed the mark recently.

Both iShares Nasdaq Biotechnology (IBB) and Biotechnology HOLDRs (BBH) have outperformed all other biotech and healthcare ETFs year-to-date. While IBB is down slightly, off 0.5%, BBH is up 8.7%. Respectively, they’re 2.7% and 3.8% above their trend lines.

Some of the funds’ success is from strong earnings reports from major holdings, such as Gilead (GILD), which beat earnings estimates for each of the last 10 quarters, reports Trang Ho for Investor’s Business Daily. The maker of HIV drugs and Tamiflu is 10.4% of IBB and 22.8% of BBH.

Another sector that could benefit from the biotech growth is agriculture.

The USDA reported that flooding along the Mississippi River and Missouri River have reduced corn and soybean acreage to be harvested as producers expect to harvest around 86% of the original acreage planted, reports High Plains Journal.

Corn planted in comparison to last year is down 7%, while soybean planted is up 17% from last year, putting pressure on food crops to sustain demand. Introduce the engineered crop, where genetic modification and engineering mimics the makeup of plants, animals and microorganisms. It could be anticipated that biotechnology could pick up where flooding left off, however, many products within this field never make it out of the pipeline, reports the Union of Concerned Scientists.

The list of engineered agricultural items in the works include tomatoes, squash, corn, soybeans and cotton.

  • PowerShares DB Agriculture (DBA), up 20.5% year-to-date
  • iShares S&P GSCI Commodity Indexed Trust (GSG), up 35.7% year-to-date

For full disclosure, some of Tom Lydon’s clients own shares of DBA.

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.