For investors seeking momentum, SPDR S&P Biotech ETF (XBI - Free Report) is probably on radar. The fund just hit a 52-week high and is up about 67.9% from its 52-week low price of $62.94/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:
XBI in Focus
XBI focuses on the biotechnology segment of the U.S. market and offers equal-weight exposure across stocks. It is spread across various market spectrums, with 46.7% allocated to small caps, 31.3% to mid caps and the rest to large caps. The fund charges investors 35 basis points a year in fees (see: all the Healthcare ETFs here).
Why the Move?
The biotech corner of the broad healthcare sector has been an area to watch lately, given the positive developments in coronavirus treatment. Moderna (MRNA) is the latest drugmaker to have shown promising results in an early-stage clinical trial for a COVID-19 vaccine. The Phase 1 trial developed neutralizing antibodies in coronavirus patients, a promising finding that has propelled the vaccine to the next phase of clinical testing.
More Gains Ahead?
Currently, XBI has a Zacks ETF Rank #2 (Buy) with a High risk outlook, suggesting continued outperformance in the months ahead. Further, 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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