Right now, the biotech sector is in the early stages of a significant rally. And the best biotech ETF that we’re recommending today is poised for market-beating gains through the end of 2016 and into 2017. The biotech expects to begin a pivotal clinical study of ganaxolone in treating CDKL5 Disorder next year. Marinus should also report results from a couple of phase 2 studies of the drug in 2018, one in treating postpartum depression and the other in treating refractory status epilepticus. That proved to be just the beginning of good news for XOMA related to product licensing deals.

This index is largely composed of biotech companies that work in health care and on developing medicines and therapeutics. Instead, it invests in businesses that are “focused on and are expected to substantially cryptocurrency broker canada benefit from extending and enhancing the quality of human and other life” through genomics. This means the fund is concentrated on health care, information technology, materials, and energy businesses.

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The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy. Currently, the fund has about 130 total positions, topping many of the other biotech ETFs featured here when it comes to breadth. Furthermore, its top three holdings at the moment – Vir Biotechnology (VIR), Legend Biotech (LEGN) and TG Therapeutics (TGTX) – collectively tally only about $16 billion or so in market value. However, BBH is largely focused on mature biotech companies that offer up many different types of treatments. What this iShares fund offers is right in the name – a more direct play on the unique category of drugs and technologies that serve genomics and immunotherapy applications.

The SPDR S&P Biotech ETF has chalked up a gain of 40% with only a couple of weeks left in the year — twice the return of the S&P 500 index. That’s why successful trial results often send shares rocketing, even if actual sales are years away. Investing in companies with no profits is risky, which is why IBD’s CAN SLIM method seeks companies that not only are profitable but are among the ones with highest earnings growth.

As for returns, the combination of holdings seems to be working for IBB. The fund has returned around 15% annually over the last ten years. Biotech drugs continue to be leading the way many pharmaceutical firms develop new products.

• If you want to skip our detailed discussion on the biotech industry, head directly to 5 Best Biotech ETFs To Buy.
• On the other hand, a successful drug can result in billions in sales.
• This week was a quieter one for the ETF industry, with just five new ETFs debuting on the market….
• Over the past five years, it has produced an average annual return of 23.67%.
• Many or all of the products featured here are from our partners who compensate us.

These top holdings, as mentioned earlier, are larger biotechs. Your exposure to smaller biotechs, therefore, is more limited. The iShares Nasdaq Biotechnology is the oldest biotech ETF and the largest in terms of net assets. It tries to track the investment results of an index composed of biotechnology and pharmaceutical equities listed on the Nasdaq stock exchange. BBH tracks the MVIS US Listed Biotech 25 Index, an index of companies that develop, produce, market, and sell drugs based on genetic analysis and diagnostic equipment.

S&P 500

You can save a lot of time with ETFs and could achieve a similar return to buying individual stocks in the same industry. The Franklin Genomic Advancements ETF has a 0.50% expense ratio and has generated an annualized return of 5.96% since its inception on Feb. 25, 2020. The fund gives investors exposure to companies that profit from DNA sequencing, gene editing and personalized medicine. The fund has 59 holdings, and the top three stocks are Thermo Fisher Scientific (6.25%), Danaher (5.64%) and Repligen (5.57%). The number of holdings in the SPDR S&P Biotech ETF currently stands at 102.

A veteran journalist with extensive capital markets experience, Jeff has written about Wall Street and investing since 2008. His work has appeared in numerous respected finance outlets, including CNBC, the Fox Business Network, the Wall Street Journal digital network, USA Today and CNN Money. Close behind IBB in terms of largest biotech ETFs is the ARK Genomic Revolution ETF (ARKG, $88.70).

Vanguard Total Stock Market…

According to Fidelity Investments, more biotech drugs were approved between 2000 and 2009 than during all of the 1980s and 1990s combined. That drug development has only picked-up speed in recent years. Alnylam’s share price had more than doubled by August, but the really big news for the biotech came in September. On review the misbehavior of markets Sept. 20, the company reported positive results from a late-stage study of RNAi drug patisiran in patients with hereditary ATTR amyloidosis with polyneuropathy. Alnylam is now pursuing U.S. and regulatory approval for the drug. The award for best-performing biotech stock of all in 2017 goes to Marinus Pharmaceuticals.

More risk, but more upside

Its expense ratio is 0.45%, equivalent to $4.50 for each $1,000 invested. Looking at an ETF’s holdings and their corresponding weights can help you determine if it’s the right fund for you. Biotechnology and all other industries are ranked based on their AUM-weighted average expense ratios for all the U.S.-listed ETFs that are classified by ETF Database as being mostly exposed to those respective industries.

Few market challenges may pose as intriguing a one right now as concentration risk. This week was a quieter one for the ETF industry, with just five new ETFs debuting on the market…. That’s quite a drop in just one year, although it was expected. Since inception, the ETF has generated an average annual return of 15.07%.

Specifically, documents from Invesco state PBE is built “by thoroughly evaluating companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value.” Among the iShares Biotechnology ETF’s top holdings are some of the biggest biotech stocks based on market capitalization rank. They include Amgen (AMGN -0.33%), Gilead Sciences (GILD 1.16%), Moderna (MRNA -2.46%), and Regeneron Pharmaceuticals (REGN 0.14%). There’s one big downside to investing in biotech stocks, though.

Nasdaq

The biotech industry is severely lagging the market this year, at least according to the SPDR S&P Biotech ETF, an industry benchmark that is down about 14% so far in 2023. However, that doesn’t mean you should avoid biotech stocks altogether. Even as the sector may struggle near term, some companies still have the tools to perform well in the long run. The three top ETFs in this best cryptocurrency brokers group have fallen less than the 16% drop in the Nasdaq Biotechnology Index and also less than the 19% decline in the S&P 500 Index in the last year as of Nov. 9. But it’s worth noting that these are hardly start-ups anymore, with the “smallest” of the three (Gilead) boasting a market capitalization of $85 billion – larger than companies like General Motors (GM) or Ford (F).

Biotech has become even more important in the age of the pandemic, and there’s significant potential for the industry to continue growing in the future. Knowing when to buy is one of the hardest parts of investing. You should invest when you’re willing to accept that and can hold your investment for the long term. However, over the short term, biotechnology hasn’t performed as well.