The biotechnology sector has managed to outperform all three major U.S. indices over the past year. While the sector is not noted for stable growth over the long term, it is known for dramatic performance and potential in innovative fields such as stem cell research, according to a report on Seeking Alpha. ETFs will continue to be the premiere method of investing in this sector due to the nature of young, upstart companies. An ETF allows investors exposure to several companies, while mitigating the risk of an upstart or smaller company going bankrupt.

Market Vectors Biotech ETF


Tisha Guerrero contributed to this article.