Biotech’s “Big Five” – Amgen (NasdaqGM: AMGN), Biogen (NasdaqGM: BIIB), Celgene (NasdaqGM: CELG), Gilead (NasdaqGM: GILD) and Regeneron (NasdaqGM: REGN) – dominate ETFs like IBB and BBH. None of those stocks are even top-10 holdings in XBI.

If there is a downside to the ongoing surge in biotech stocks and ETFs it is that the surge has prompted talk of a bubble bursting at the hands of frothy valuations.

The concern is legitimate with biotech trading at twice its historical multiple, but XBI has delivered superior returns relative to some noteworthy and pricy growth stocks. For example, since the start of 2013, XBI has offered double the returns of Amazon (NasdaqGM: AMZN). [Health Care ETFs Deal With High Valuations]

“With valuations at current levels and the recent number of IPOs biotechs may look to be bubbly territory to some, but investors may want to remember that the industry is driven by sector-specific factors including a powerful R&D pipeline, extremely high profit margins and favorable pricing power,” said Mazza.