ETF Trends
ETF Trends

Biotechnology and pharmaceutical sector ETFs were the clear winners as Republicans swept the U.S. elections, easing concerns Democrats would implement controls on drug prices.

On the other hand, Mexico ETFs plunged in the wake of President-elect Donald Trump’s triumph.

On Wednesday, the BioShares Biotechnology Products Fund (NasdaqGM: BBP), which follows U.S.-listed biotech companies with a primary product offering or product candidate that has landed FDA approval, surged 8.9%.

The ALPS Medical Breakthroughs ETF (NYSEArca: SBIO), which focuses on small- and mid-cap companies that have one or more drugs in either Phase II or Phase III U.S. FDA clinical trials, jumped 9.1%.

The SPDR S&P Biotech ETF (NYSEArca: XBI), which follows an equal weight methodology, advanced 9.5%.

Drug stocks looked healthier as traders unwound the political risk that depressed the biotech sector ahead of the election after Democrat runner Hillary Clinton censured the exorbitant prices on specialty drugs.

“Right now I think most biotech and pharma companies might be sighing a sigh of relief because Mrs. Clinton looked like she might do something drastic on drug pricing,” Clive Meanwell, chief executive officer of Medicines Co., told Bloomberg.

Trump, on the other hand, may have more pressing priorities.

“I suspect he’ll have bigger health-care topics to take on first.”


Meanwhile, lagging the broader markets, Mexico country-specific exchange traded funds plunged Wednesday, with the iShares MSCI Mexico Capped ETF (NYSEArca: EWW), which holds broad range of companies in Mexico, and SPDR MSCI Mexico Quality Mix ETF (NYSEArca: QMEX), which tracks a more customized basket of Mexico stocks that were selected based on metrics like value, quality and low volatility, plummeting 9.0% and 6.8%, respectively.

Further dragging on the Mexico ETFs, the Mexican peso depreciated as much as 13.4% to a record low of 20.78 against the dollar before paring some of its fall to 19.85 or 8.4%. Even after the small recovery, Wednesday’s retreat is still the largest drop since the so-called Tequila Crisis of 1994 when Mexico nearly went bankrupt, the Financial Times reports.

Agustín Carstens, Mexico’s central bank governor, argued that Trump’s victory is comparable to a sever “hurricane” for Mexico, which has an intimate economic relationship with the U.S. – Mexico sends some 80% of its exports to the U.S. The markets will have to wait and see if Trump makes good on his provocative rhetoric on illegal immigration and protectionist policies during the campaign trail.

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