Biotech ETF Rally Gains Momentum

The iShares Nasdaq Biotechnology ETF (NasdaqGS: IBB), which tracks the Nasdaq Biotechnology Index, and rival biotechnology exchange traded funds have been hindered by presidential politics this year.

That is old news. Just look at IBB’s recent price action. The largest biotechnology ETF is residing at its highest levels since January. Investors who are closely watching the presidential race will want to keep an eye on Democratic nominee Hillary Clinton in the coming months. If Clinton makes her way to the Oval Office and implements more regulation on pharmaceutical drug pricing, biotech companies may underperform the broader market.

SEE MORE: BBP – An Outperforming Biotechnology ETF

IBB is heavily allocated to the largest biotech names. For example, Amgen (NasdaqGS: AMGN), Gilead Sciences (NasdaqGS: GILD) and Celgene (NasdaqGS: CELG) combine for about a quarter of IBB’s weight.

Last month, Democratic presidential nominee, Hillary Clinton, put the spotlight on Mylan (NasdaqGS: MYL) EpiPen prices, triggering a selloff in biotech exchange traded funds and reminding investors of political risks in an election season.

IBB’s surge “comes on the heels of two major recent acquisitions by Allergan in the biotech field. The Ireland-based company announced its $1.7 billion deal with Tobira Therapeutics on Tuesday, and made news last week after acquiring Vitae Pharmaceuticals in a $639 million all-cash deal. Other stocks rose amid speculation of more takeovers this week. Clovis Oncology finished up 2.7 percent and Eli Lilly also closed up about half a percent after rumors that Eli may buy the cancer treatment company,” reports CNBC.