More M&A Deals Could Boost Biotech ETFs

Biotech ETFs are among the best-performing sector funds this year with some gaining more than 50%.

Looking ahead, President Obama’s health-care reform will help cover more people, which would boost demand and the drug industry.

“In our view, the biotech industry is much less susceptible to government intervention than are other health-care subsectors such as hospital operators or MCOs,” according to Morningstar analyst Robert Goldsborough. “And we think an ETF is the appropriate tool for investing in this notoriously volatile subsector.”

Instead of picking individual risky stocks, ETFs provide a diversified exposure to the whole sector. Some biotech ETFs include:

  • Market Vectors Biotech ETF (NYSEArca: BBH): AMGN is 17.1%
  • iShares Nasdaq Biotechnology ETF (NYSEArca: IBB): AMGN is 8.4%
  • First Trust Amex Biotech Index Fund (NYSEArca: FBT): AMGN is 5.4%

For more information on the biotech sector, visit our biotechnology category.

Max Chen contributed to this article.