Related: A Good Time to Own Biotech ETFs

Investors 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. The White House is also looking to help the Food and Drug Administration (FDA) expedite new drug approvals, which could serve as a major catalyst for the biotechnology space.

In the third quarter, investors added $175.2 million to XBI and $139.5 million to IBB. To start the fourth quarter, the two ETFs have added about $164 million in new assets on a combined basis.

ETF traders who are betting big on the biotechnology sector rebound have also utilized leveraged long options including the Direxion Daily S&P Biotech Bull Shares (NYSEArca: LABU), which takes the 3x or 300% daily performance of the S&P Biotechnology Select Industry Index.

For more information on the biotech sector, visit our biotechnology category.