iShares Nasdaq Biotechnology Index Fund
The iShares NASDAQ Biotechnology Index Fund (IBB) is a great way to both play upstart drugmakers and get exposure to bigger players for some stability.
For instance, the top three IBB holdings as of June 19 are Regeneron (REGN), Gilead Sciences (GILD) and Amgen (AMGN) — a trifecta worth about $175 billion. These are hardly up-and-coming players, with all running very profitable operations and no risk of going to zero on one bad drug trial. However, it also has a stake in smaller players that will break out, like Isis Pharmaceuticals (ISIS), which has more than doubled since Jan. 1.
All told, the IBB fund is up an impressive 26% year-to-date — almost double the S&P 500 — and is up about 36% in the last 12 months.
Given the demographic pressured fueling healthcare generally — driven by aging baby boomers — and the specific potential of niche drugs and breakthrough medical technology, all investors should look to this sector for growth. And given that healthcare also is a (mostly) recession-proof sector, any downturn shouldn’t hit IBB too badly in the months ahead.
With almost $3.1 billion in assets and a six-digit daily trading volume, this is a legit and liquid fund. IBB will cost you 0.48% in expenses (that’s $48 in fees annually for $10,000 invested).