XBI “tracks 90 U.S. biotech stocks using an equal-weighted methodology. This effectively gives smaller companies a more meaningful contribution to the overall return of the fund. Over the last year, this ETF has experienced a similar series of peaks and valleys. However, it has also developed a more definitive pattern or higher highs and higher lows,” according to See It Market.
The cap-weighted iShares Nasdaq Biotechnology ETF (NasdaqGM: IBB), the largest biotechnology ETF by assets, is also showing encouraging technical signs. That ETF is up 11% year-to-date.
Rare are the occasions that biotechnology stocks and exchange traded funds are seen as offering value. In fact, the sector historically trades at multiples that are elevated relative to broader benchmarks, but in a year of struggles for biotechnology names, some analysts see value with some big-name biotech stocks.
IBB, which holds nearly 190 stocks and is a cap-weighted ETF, has a price-to-earnings ratio of just over 21 and a price-to-book ratio of 4.92. The ETF’s three-year standard deviation is just over 25 percent. IBB is the largest biotech ETF by assets.
For more information on the biotech sector, visit our biotechnology category.