A traditionally higher beta sector to the overall market is that of Biotechnology, and last week we witnessed very heavy trading activity in the giant in terms of assets under management in this sector, iShares Nasdaq Biotechnology (NasdaqGM: IBB).
The fund has traded more than 1 million shares in four of the past six trading sessions, versus average daily trading volume of about 515,000 shares.
Top holdings in IBB currently are lined up as follows: REGN (7.63%), AMGN (7.38%), ALXN (7.32%), CELG (5.83%), and GILD (5.70%), and the fund owns 118 individual equities in the Biotech space, with all of these companies being listed on Nasdaq. [Biotech ETFs for an M&A Boom]
Relative strength has been impressive thus far in 2012, as IBB has rallied 15.38% versus the S&P 500 Index up 3.37% during the same time period, and in the trailing one year period IBB is up 11.22% versus the S&P down 2.94%.
However, even this high flying space has shown signs of “cracking” recently, as one might pull up a chart and note a steep intraday sell-off and “low print” in IBB on Friday, as the ETF traded as low as $114.97 a share before recovering significantly into the market close.
To put things in perspective, from recent peak to trough, the fund had fallen more than 9% in just a matter of six trading days.
Other alternatives in the “Biotech” equity space include SPDR S&P Biotech (NYSEArca: XBI), First Trust Amex Biotechnology (NYSEArca: FBT), PowerShares Dynamic Biotechnology & Genome (NYSEArca: PBE), and Market Vectors Biotech (NYSEArca: BBH).
From the leveraged side, ProShares Ultra Nasdaq Biotechnology (NasdaqGM: BIB) delivers two times the daily leveraged exposure to the same index that IBB tracks, and conversely, ProShares UltraShort Nasdaq Biotechnology (NYSEArca: BIS) caters to those looking for daily short exposure to the index.
From a performance standpoint, FBT has led the pack year to date, having rallied 29.94%, with BBH coming in a close second, up 27.12%. XBI and PBE are up 18.51% and 4.94% respectively, and IBB falls somewhere in the middle of the pack up 15.38%.
iShares Nasdaq Biotechnology
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