For investors seeking momentum, VanEck Vectors Biotech ETF (BBH - Free Report) is probably on radar now. The fund just hit a 52-week high and is up about 27.2% from its 52-week low price of $95.77/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
BBH in Focus
BBH focuses on the biotechnology segment of the U.S. market. The fund has a large-cap focus with key holdings in Amgen (AMG - Free Report) , Celgene (CELG - Free Report) and Gilead Sciences (GILD - Free Report) that account for a double-digit allocation each. It charges investors 35 basis points a year in fees (see: all the Healthcare ETFs here).
Why the Move?
The biotech sector has been an area to watch lately given its impressive comeback after a slew of Trump statements and the fate of Obamacare that spooked the sector early this year. Then a couple of recent actions charged up the space, pushing the stocks higher. In particular, the President has promised to reduce federal regulations by 75–80% and streamline the Food & Drug Administration (FDA) approval process. This would make it easier for biotech companies to bring new products to the market. Trump’s proposed tax reforms and cash repatriation policy are also supporting the rally.
More Gains Ahead?
Currently, BBH has a Zacks ETF Rank of 3 or ‘Hold’ rating with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely some promise for those who want to ride this surging ETF a little further.
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