Another corner of the market that has rallied in 2011 is the biotech/pharmaceutical sector. The iShares Nasdaq Biotechnology (NasdaqGM: IBB) is up 14% over the past 12 months. Gilead Sciences (Nasdaq: GILD) paid $11 billion for the hepatitis C drugmaker Pharmasset Inc. (VRUS), and the deal lifted the biotech ETF.
Consumer staples sector ETFs have also had a fair run in 2011 with investors favoring defensive sectors. Not only do these stocks offer some yield, they play defense well. SPDR Consumer Staples Select Sector Fund (NYSEArca: XLP) has gained about 16% over the past 12 months.
“Nevertheless, the three primary non-cyclical stock ETFs –healthcare, utilities, staples–have all become even stronger in these past 12 weeks. This suggests that non-cyclicals are performing as well as they ever have in terms of momentum. Equally compelling, they may be less affected by systemic shocks and uncertainties,” Gary Gordon wrote for Seeking Alpha.
Utilities Select Sector SPDR Fund
Tisha Guerrero contributed to this article.