Health and Healthcare

The Best Biotech ETFs to Buy Ahead of ASCO

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The 55th annual meeting of the American Society of Clinical Oncology (ASCO) is just around the corner. Biotech and pharmaceutical companies will descend on Chicago for a five-day all-out conference (May 31 to June 4) on the development of cancer treatments.

This is known as the world’s largest clinical cancer conference, and it always delivers new results on clinical trials and updated treatments in the field. Not to mention, this conference has the potential to make or break companies in the space, depending on their results.

The theme for this year’s conference is “Caring for Every Patient, Learning From Every Patient,” which focuses on making precision medicine a reality by driving progress and expanding its reach so that every patient can have the opportunity to benefit. This year is expected to see over 32,000 attendees, counting among them the world’s best oncologists, researchers and scientists.

More than 2,400 abstracts were accepted for presentation at the Annual Meeting, and more than 3,200 additional abstracts were accepted for online publication. The vast majority of these abstracts will be publicly posted on May 15, although the key data for these abstracts will be released with the presentations during the actual meetings.

24/7 Wall St. takes a look at the ASCO annual meeting each year and picks out the companies that could have the biggest boom or bust at the conference. We cannot stress enough that there is an incredible amount of implied risk for companies within the biotech industry, and especially at this time of year with a conference of this magnitude.

To mitigate this risk and concern about picking the winners or the losers within the biotech industry, ETFs offer a sampling and exposure to this market without an all-or-none risk in any single company’s stock. As the saying goes: “There’s an ETF for that strategy.” ETF Database has collected much of the information about these ETFs, among others, and made it easily accessible for those looking to get into the game. And investors can use a number of exchange-traded funds to invest in a risky biotech industry.

iShares Nasdaq Biotechnology ETF (NASDAQ: IBB) has been around since February 2001, and it aims to track the Nasdaq Biotechnology Index. This fund seeks to track the investment results of an index composed of biotechnology and pharmaceutical equities listed on the Nasdaq. Note that this is the largest biotech ETF, with $7.34 billion in assets under management. Its overall expense ratio is 0.47%, and it has traded up about 9% so far in 2019. This ETF has a total of 224 holdings. The top 10 holdings include a mix of large-cap domestic biotech companies:

  1. Celgene (8.54%)
  2. Gilead (8.45%)
  3. Amgen (7.98%)
  4. Biogen (5.79%)
  5. Vertex Pharmaceuticals (5.55%)
  6. Illumina (4.22%)
  7. Alexion Pharmaceuticals (4.15%)
  8. Regeneron Pharma (3.37%)
  9. Incyte (2.24%)
  10. Biomarin Pharmaceutical (2.08%)

SPDR S&P Biotech ETF (NYSEARCA: XBI) has been around since February 2006 and aims to track the S&P Biotechnology Select Industry Index. This fund seeks to provide exposure to the biotechnology segment of the S&P. It has $4.20 billion in assets under management. Its overall expense ratio is 0.35%, and it has traded up 17% so far in 2019. This fund has a total of 120 holdings. The top 10 holdings include a smattering of U.S. biotechs in the S&P 500:

  1. Ligand Pharmaceuticals (1.89%)
  2. Exact Sciences (1.84%)
  3. Celgene (1.78%)
  4. Sage Therapeutics (1.77%)
  5. Global Blood Therapeutics (1.76%)
  6. Portola Pharmaceuticals (1.75%)
  7. Alnylam Pharmaceuticals (1.71%)
  8. Alexion Pharmaceuticals (1.68%)
  9. Ionis Pharmaceuticals (1.68%)
  10. Array BioPharma (1.65%)

First Trust NYSE Arca Biotechnology Index Fund (NYSEARCA: FBT) has been around since June 2006 and aims to track the NYSE Arca Biotechnology Index. The fund targets biopharma companies involved with recombinant DNA technology, molecular biology, genetic engineering, monoclonal antibody-based technology, lipid/liposome technology, and genomics. It has $2.87 billion in assets under management, its overall expense ratio is 0.57% and it was last seen trading up 8% so far in 2019. This ETF has a total of 30 holdings. Its top 10 holdings include mostly domestic biopharma firms:

  1. Alnylam Pharmaceuticals (3.57%)
  2. Alexion Pharmaceuticals (3.55%)
  3. Bio-Techne (3.55%)
  4. Exact Sciences (3.51%)
  5. IQVIA (3.43%)
  6. Charles River Laboratories (3.41%)
  7. Incyte (3.41%)
  8. Bluebird Bio (3.40%)
  9. Gilead (3.39%)
  10. Biomarin Pharmaceuticals (3.38%)

VanEck Vectors Biotech ETF (NASDAQ: BBH) has been around since December 2011, and it aims to track the MVIS US Listed Biotech 25 Index. This ETF seeks to track the overall performance of companies involved in the development and production, marketing and sales of drugs based on genetic analysis and diagnostic equipment. It was last seen to have $374.1 million in assets under management. Its overall expense ratio is 0.35%, and it has traded up 9% so far in 2019. This fund has a total of 25 holdings. The top 10 holdings include mostly domestic biotech firms:

  1. Amgen (8.44%)
  2. Gilead (6.71%)
  3. Celgene (5.94%)
  4. Allergan (5.49%)
  5. Illumina (5.37%)
  6. Exact Sciences (5.33%)
  7. IQVIA (5.13%)
  8. Alexion Pharmaceuticals (4.80%)
  9. Vertex Pharmaceuticals (4.79%)
  10. Biomarin Pharmaceutical (4.34%)


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