The iShares Nasdaq Biotechnology ETF (NasdaqGM: IBB), the largest biotechnology exchange traded fund by assets, is up nearly 11% year-to-date and that could be encouraging some traders to turn bullish on once-beloved biotechnology stocks and ETFs.
Healthcare stocks and ETFs rallied immediately following Republican Donald Trump’s surprising November victory. The impact of a Trump presidency on healthcare stocks remains to be seen. Candidate Trump rebuked Obamacare and if successful in that effort, there would likely be some effect on diversified healthcare ETFs due to their exposure to health insurance providers.
While Trump was seen as the preferred candidate for the healthcare sector, the newly inaugurated president has not been shy about unleashing rhetoric aimed at high pharmaceuticals prices. Additionally, some industry observers believe healthcare stocks could face more politically-induced headwinds as the Republican-controlled Congress looks to unwind the Affordable Care Act, also known as Obamacare.
“Longer term, however, he likes biotech given “the demographics of aging, the global market and it looks like this is an area that might be relatively less likely to be affected or slammed into by various Twitter policies or public politician-led discussions about drug prices,” said Max Wolff, market strategist at 55 Capital, in an interview with CNBC.