Is it worth investing in iShares Biotechnology ETF (IBB)? – TradingView News

Are you looking for broad exposure to the Healthcare – Biotech share market segment? You should consider the iShares Biotechnology ETF IBBpassively managed exchange-traded fund launched on May 2, 2001.

While passively managed ETFs are a great tool for long-term investors, they are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility and tax efficiency.

Sector ETFs also provide investors with access to a wide range of companies from specific sectors that offer low risk and diversified exposure. Healthcare – Biotechnology is one of the 16 broad Zacks sectors of the Zacks Industry Ranking. He currently ranks 7th, putting him in the top 44%.

Index details

The fund’s sponsor is Blackrock. It has accumulated assets worth over $6.94 billion, making it one of the largest ETFs trying to match the performance of the Healthcare – Biotech segment in the stock market. IBB seeks to match the performance of the Nasdaq Biotechnology Index before fees and expenses.

The ICE Biotechnology Index includes securities of companies listed on NASDAQ that are classified as biotechnology or pharmaceutical.

Costs

Expense ratios are an important factor in ETF returns, and over the long term, cheaper funds can significantly outperform their more expensive counterparts, other things being equal.

The annual operating costs of this ETF are 0.45%, making it comparable to most similar products on the market.

Its trailing 12-month dividend yield is 0.31%.

Sector exposure and largest assets

It’s important to dive into an ETF’s holdings before investing, despite the many advantages of this type of fund, such as diversified exposure that minimizes the risk of a single stock. Most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has the largest allocation to the Healthcare sector at approximately 99.90% of the portfolio.

Looking at individual holdings, Gilead Sciences Inc GUILD accounts for approximately 8.31% of total assets, followed by Regeneron Pharmaceuticals Inc REGN and Amgen Inc AMGN.

The 10 largest holdings account for approximately 50.26% of total assets under management.

Performance and risk

So far this year, IBB has lost approximately -2.37% and is up approximately 4.59% over the past year (as of May 30, 2024). Over the past 52 weeks, the fund has traded between $112.41 and $140.89.

The ETF has a beta of 0.75 and a standard deviation of 22.20% for the trailing three-year period, making it a high-risk pick in this space. Holding approximately 226 shares, it effectively diversifies company-specific risk.

Alternatives

The IShares Biotechnology ETF carries a Zacks ETF Rank of 2 (Buy), which is based on asset class expected return, expense ratio and momentum, among other factors. For this reason, IBB is an excellent option for investors seeking exposure to the healthcare ETF market segment. There are other additional ETFs on the market that investors may also consider.

First Trust NYSE Arca Biotechnology ETF FBW tracks the NYSE Arca Biotechnology Index and the SPDR S&P Biotech ETF XBI tracks the S&P Biotechnology Select Industry Index. The First Trust NYSE Arca Biotechnology ETF has $1.11 billion in assets and the SPDR S&P Biotech ETF has $6.72 billion. FBT has an expense ratio of 0.56% and XBI charges 0.35%.

Bottom line

To learn more about this product and other ETFs, find products that fit your investment goals, and read articles on the latest developments in the world of ETF investing, visit the Zacks ETF Center.

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