Tax reform is also seen as a potential boon for the healthcare sector, including biotech companies. Large-cap biotech and pharmaceutical companies have been holding billions of dollars overseas to avoid harsh U.S. taxes. With a new lower corporate tax rate, those companies are expected to repatriate that cash back to the U.S., which could prompt increased deal-making among smaller biotech names, such as some components in SBIO.

“Yes, SBIO is coming off a year in which gained 45.6%, outperforming the Nasdaq Biotechnology Index by a better than 2-to-1 margin,” reports InvestorPlace. “That does not mean the ETF can’t offer a sequel in 2018. In fact, risk-tolerant investors may want to consider SBIO right here, right now, as January usually features some of the biotechnology industry’s most important conferences. Those events could bring positive (or negative) catalysts for SBIO holdings.”

Top holdings in SBIO currently include Galapagos NV (NASDAQ:GLPG), BeiGene Ltd. (NASDAQ:BGNE) and Taro Pharmaceutical Industries Ltd. (NASDAQ:TARO). That trio combines for 11% of the ETF’s weight.

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