IBB trades with a P/E ratio of 42.5 and a price-to-book ratio of 10.2, which makes the ETF appear richly valued relative to broader health care ETFs. For example, those numbers on the iShares U.S. Healthcare ETF (NYSEArca: IYH) are 28.2 and 5.6, according to iShares data.

Some market observers have been quick to rebuff Yellen’s assertion that biotech valuations are stretched. ISI Group analyst Mark Schoenebaum said in an open letter to Yellen following her testimony that data going back to 1993 for the biotech sector “show that the current ratio is roughly in-line with the historical median and is approximately 80% below the peak.”

Earlier this year, rampant concerns about biotech valuations sent IBB down 21.1% from its February peak to its April nadir, pushing it and other biotech ETFs into bear markets along the way. However, IBB has surged 16.3% since its April trough, a rally that few have chosen to acknowledge. [Biotech ETFs Rally and no one Cares]

iShares Nasdaq Biotechnology ETF

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