Year-to-date, investors have pulled nearly $600 million combined from IBB and XBI. XBI is an equal-weight fund.
“A continued recovery in the XBI would likely to get more biopharma fund flows pouring back in during the first half of the year…We think fund managers will be forced to ‘chase’ the recent performance given they are generally quite under-weight the group,” Barron’s reports, citing Jefferies’ Yee.
Healthcare ETFs, including biotech funds, could benefit from politicians’ plans to lower drug prices, something the White House took aim at last year. The administration has focused primarily on middlemen like pharmacy-benefit managers instead of manufacturers. The new policies have a more subtle affect on the overall industry as it may affect sales of certain blockbuster drugs but damage the share prices of smaller companies.
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