Saturday, February 25, 2006

Biotech Rotation

There definitely appears to be a rotation in biotech sector. The mid-tier to smaller companies are outperforming the large cap biotechs. This is pretty obvious if you compare the various biotech exchange traded funds (ETF’s). The Merrill Lynch Holders Trust (Ticker: BBH) has underperformed the other biotech ETF’s such as the: Dynamic Biotechnology & Genome Portfolio (Ticker: PBE), Biotech SPDR (Ticker: XBI) and the Nasdaq Biotechnology iShares (Ticker: IBB). The BBH is ~ 70% concentrated in the large cap biotechs: Genentech and Amgen. The rest of the biotech exchange traded funds have a more diversified portfolio and are trading at 52 week highs. I would probably avoid the BBH for most biotech investors since this ETF is not well diversified and is expensive to purchase (offered only in 100 share lots). Out of the 4 ETF’s, the one I like the most is PBE. This fund has a little bit of everything and provides a good diversification. Here’s a 6 month chart comparing the performance of BBH to PBE.

Note: I do not own any of the biotech ETF's.


At October 30, 2021, Blogger Virtual Pharmacists said...

Nice article, which you have shared here. Your article is very informative and I liked your way to express your views in this post. The article you have shared here is very informative and the points you have mentioned are very helpful. Thanks for sharing this article here. GP Practice Clinical Pharmacist


Post a Comment

<< Home