While Covid-19 variants on the rise, the push for more vaccinations make the Invesco Nasdaq Biotechnology ETF (IBBQ) an ETF to watch.

As Covid cases experience a resurgence, more companies are mandating workers get vaccinated. This could give the biotech industry its own proverbial shot in the arm.

The fund is based on the Nasdaq Biotechnology Index, which is designed to measure the performance of securities listed on the Nasdaq Stock Market that are classified as either biotechnology or pharmaceutical companies. IBBQ comes with a low expense ratio of 0.19%.

About 50% of the fund’s holdings reside in large cap equities. In terms of large cap factors, investors get an even mix of value and growth—the former for quality investments and the latter to capture future upside.

IBBQ also adds a dose of small- and mid-cap holdings. The majority of these holdings are focused on the the growth factor.

“The potential for booster shots coming online to tackle COVID-19 variants has brought talk of a long-term market emerging in coronavirus vaccinations, a scenario which while presenting further challenges for health agencies also opens up new avenues for growth in the biotech sector,” a Cantech Letter article said. “It’s all part and parcel of the current Golden Age in biotechnology, says Brian Bloom of healthcare investment firm Bloom Burton & Co., who thinks investors should be paying attention to the space as the pandemic market wanes and the endemic market opens up.”

IBBQ 1 Year Performance

A Strong Q2 for IBBQ’s Top Holding

IBBQ’s top holding is a familiar name, especially within the past year—Moderna. The biotech behemoth comprises 13% of the fund. The company just recently topped earnings expectations for the second quarter thanks to the sales of its vaccine.

“During the quarter, Moderna earned $6.46 per share, minus certain items, on $4.35 billion in sales,” an Investor’s Business Daily article said. “Moderna earnings flipped from year-earlier losses and sales skyrocketed close to 6,400%. Its Covid vaccine generated close to $4.2 billion of sales. The balance came from grants and collaborations.”

The article also noted that Moderna “raised its full-year outlook and now expects $20 billion in sales, including already reported sales and signed agreements for Covid vaccine doses. This year, Moderna says it can make 800 million to 1 billion doses of the vaccine.”

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