Other biotech ETFs are on the mend, too. After struggling through one of its worst annual performances in several years in 2016, the SPDR S&P Biotech ETF (NYSEArca: XBI), the third-largest biotechnology exchange traded fund, is surging to start 2017.
XBI is an equal-weight ETF, featuring more exposure to smaller to 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.
“Biotech stocks, particularly the XBI, look attractive on a technical level to Ari Wald, head of technical analysis at Oppenheimer,” according to CNBC.
Market observers are growing more bullish on the sector as a Republican-led Congress and administration could enact reforms to free cash held overseas for tax reason by large U.S. pharmaceutical companies, which could pave the way for increased acquisitions in the sector.
For more information on the biotech sector, visit our biotechnology category.