Should You Keep Your Portfolio Healthy With Biotech ETFs?
Zacks Investment Research | Sep 12, 2017 03:08AM ET
The biotech sector is going through the roof right now with SPDR S&P Biotech (MX:XBI) ETF the source .
Investors should note that CAR-T is a fresh immunocellular therapy and many companies are eyeing it. In fact, Gilead Sciences (NASDAQ:GILD) announced the buyout of Kite Pharma (NYSE:K) for $11.9 billion in late August (read: Biotech ETFs Soar on Gilead-Kite Deal ). Kite Pharma is expected to receive approval for its CAR-T therapy axicabtagene ciloleucel (axi-cel) shortly. With this acquisition, Gilead will step into the new arena of oncology treatment, known as CAR-T, which targets the body’s own immune system to fight tumors.
Two months ago, Clovis Oncology (NASDAQ:CLVS) shares also skyrocketed following the company’s positive cancer drug data. The company then said that clinical trial data on its ovarian cancer drug treatment indicated that it may substantially help more patients than expected (read: 4 Stocks & ETFs to Buy on Clovis' Positive Drug Data ).
If this was not enough, Teva Pharmaceutical (NYSE:TEVA) amid a bribery scandal .
Compelling Valuation
Biotech stocks were the most hurt among the S&P 500 members last year. This has probably made the space cheap and helped it to be back with a bang. Biotech ETF XBI added about 17.7% in the last three months (as of Sep 11, 2017) while SPDR S&P 500 ETF (NYSE:SPY) (AX:SPY) was up 2.9%. The fund XBI has a relative strength index of 66.95. This means that the fund is yet to enter the overbought territory.
Also, fears over price gouging are ebbing substantially in the Trump administration. In a nutshell, the space is riding on research and development and may log more returns ahead.
ETFs to Tap
Below we highlight a few biotech ETFs that can benefit investors with solid gains (see all Health Care ETFs here).
Direxion Daily S&P Biotech Bull 3X LABU
Ultrapro Nasdaq Biotechnology Proshares UBIO
ProShares Ultra Nasdaq Biotechnology BIB
iShare Nasdaq Biotech ETF IBB
Bioshares Biotech Clinical Trial (HM:BBC)
VanEck Vectors Biotech ETF (LON:BBH)
Bioshares Biotech Products (BS:BBP)
Loncar Cancer Immunotherapy ETF CNCR
ALPS Medical Breakthroughs ETF (SI:SBIO)
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