Beyond noting that each stock makes up roughly the same proportion in this ETF, investors should also note that just 20 stocks are in FBT's basket. So, on average, each company will only make up about 5% of the total, though this can fluctuate in between rebalancing dates.
This has been the worst of the three in terms of performance, but it has still beaten out broad benchmarks, adding about 27.5% in the past six months. Longer term the performance has also been shakier, adding 'just' 37%, though its focus on smaller securities could help it outperform if an M&A wave hits the biotech world (see Food ETFs in Focus on Deal Wave).
Biotechnology ETFs have had a pretty solid run over the past few months, outpacing broad markets, and the health care sector in general as well. Given the current trend in the market towards high growth sectors and away from dividends, these firms could certainly continue their recent run and move higher in the summer months.
This could be especially true given the decent industry rank for this segment, how well the sector is positioned for Obamacare implementation, and the many M&A opportunities in this corner of the investing world. So, if you are looking for high growth, high momentum play, any of the aforementioned biotech ETFs could definitely be a solid pick for the weeks and months ahead.
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