Biotech ETFs To Buy On The Dip [SPDR S&P Biotech (ETF), Gilead Sciences, Inc., iShares NASDAQ Biotechnology Index (ETF)]

The most popular ETF in this space – Nasdaq Biotechnology (NASDAQ:IBB) – has slumped 13.25% in the past one month, with around 7% of the losses coming in the past one week itself.

Other ETFs including NYSE Arca Biotechnology Index Fund (NYSEARCA:FBT), Market Vectors Biotech ETF (NYSEARCA:BBH) and Dynamic Biotech & Genome (NYSEARCA:PBE) have lost in the range of 10%–14%.

SPDR S&P Biotech ETF (NYSEARCA:XBI) was the worst hit in this space, having eroded almost 16% in the past one month. While XBI took the past 12 months to clock a gain of 38%, the ETF has eroded almost half of the good work in a single month.

Bottom Line

Despite the beating that the biotech sector has received in recent times, its long-term prospects still look promising. The sector is expected to witness continuing launch of new drugs, which will boost both the top and the bottom line of biotech companies.

Let us not forget all the above mentioned ETFs have added more than 35% in the past one year and have gained more than 180% in the past five years.

This impressive outperformance is expected to continue going forward, given the fact that all the above ETFs also have a favorable Zacks ETF Rank (#1 or #2), so it might be best to wait through the volatility and remain a buyer of this recently beaten-down sector.

This article is brought to you courtesy of Eric Dutram.

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