“Roughly half of this fund’s holdings are early-stage players with no drug on the market yet,” Goldsborough said in a note on PBE. “Would-be investors should note that because of the index’s equal-weight scheme, these smaller firms, with decidedly uncertain prospects but explosive upside potential, loom larger.”

The iShares Nasdaq Biotechnology ETF (NYSEArca: IBB) has gained 37.0% year-to-date.

IBB tries to reflect the performance of the Nasdaq Biotechnology Index, which tracks biotech and pharmaceutical companies. The fund has a 0.48% expense ratio.

The iShares ETF is the broadest in the biotech space, with 125 holdings. Looking at sub-sector breakdowns, biotech is 76.7% and pharma is 23.2%. As a market-cap weighted index ETF, giant-cap stocks make up 24.0% of IBB, large-cap is 22.4%, mid-cap is 32.9%, small-cap is 13.1% and micro-caps is 7.7%.

Top holdings include Celgene 8.1%, gilead 7.9%, amgen 7.9%, Biogen 6.6% and Regeneron Pharmaceuticals (NasdaqGS: REGN) 6.0%

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

Max Chen contributed to this article.