“We like to invest in companies with innovative products, but at reasonable prices. Biotech has become too rich for our tastes,” Curt Gross, research director at FAI Wealth Management, said in a Wall Street Journal article.
Nevertheless, analysts point to strong fundamental drivers that are supporting the biotechnology sector. [Sell-Off in Biotech ETFs Could Be a Temporary Setback]
“We aren’t seeing any reasons to believe that the biotech market is facing any significant slowdown–the industry’s pipeline for new drugs is strong and late-stage clinical trials are still very active,” Christopher Raymond, a senior biotech analyst at Robert W. Baird & Co., said in the WSJ article.
Other biotech ETFs that declined in October include:
- SPDR S&P Biotech ETF (NYSEArca: XBI): down 8.9%; XBI equally weights its holdings, so the fund has a larger tilt toward smaller companies.
- First Trust NYSE Arca Biotechnology Index Fund (NYSEArca: FBT): down 2.0%; FBT also equally weights its holdings, but is home to just 20 stocks.
- Market Vectors Biotech ETF (NYSEArca: BBH): down 1.7%; BBH tracks the 25 largest U.S. listed biotech companies on the market.
- PowerShares Dynamic Biotechnology & Genome Portfolio (NYSEArca: PBE): down 0.4%; PBE selects a group of 30 biotech and genome stocks based on fundamental factors like price momentum, earnings momentum, quality, management action and value.
For more information on the biotech sector, visit our biotechnology category.