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Should You Buy Biotech ETFs Now?
Biotech stocks are shining in June after underperforming the broader indexes for the past few months. Last week was the best week for major biotech ETFs since November as Biogen’s (BIIB - Free Report) stock surged after the FDA approved its Alzheimer’s drug.
This was the first approval of an Alzheimer’s treatment in about two decades. Though there is some controversy about the approval and three members of an outside experts’ committee have since resigned over the decision, many analysts believe that the approval suggests a more supportive and constructive regulatory environment for drug approvals now.
Some biotech stocks like Clover Health Investments (CLOV - Free Report) and Inovio Pharmaceuticals (INO - Free Report) surged as became popular with meme stock traders on forums like Reddit’s WallStreetBets.
Last year, biotech stocks & ETFs had a strong rally, particularly as many companies were working on Covid testing, treatments and vaccines. This year, investors have rotated away from last year’s winners into cyclical areas, but biotech stocks and ETFs deserve a place in investors’ portfolios due to their excellent growth potential.
Instead of trying to pick winners in this volatile space, it is better to invest in broader biotech ETFs that stand to benefit from increased investor interest and rising spending on drugs and healthcare all over the world.
To learn more about the iShares NASDAQ Biotechnology ETF (IBB - Free Report) , Invesco Nasdaq Biotechnology ETF (IBBQ - Free Report) and SPDR S&P Biotech ETF (XBI - Free Report) , please watch the short video above. Amgen (AMGN - Free Report) , Gilead (GILD - Free Report) and Moderna (MRNA - Free Report) are among the top holdings in these ETFs.
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