iShare NASDAQ Biotechnology Index (IBB)
Aug
18
Written by:
8/18/2008 12:47 PM
iShare NASDAQ Biotechnology
Index (IBB)
A recent run-up in biotechnology shares has led to new highs
for the iShares NASDAQ Biotechnology Index (IBB) Exchange Traded Fund (ETF).
52 Week High
Although experiencing a slight
pullback on a down day in the markets, the IBB is close to its 52 week high of 90.87
a share. The pullback is an opportunity to purchase shares in the ETF which
attempts to duplicate the return of the NASDAQ Biotechnology Index.
Holdings
The ETF is
comprised of stocks in the biotechnology sector which trade on the open market
including major holdings in Amgen (AMGN), Biogen Idec (BIIB), Celgene (CELG),
Gilead (GILD), and Genzyme (GENZ) to name a few.
Reduced Risk
This is a great way to play the
sector with taking on the individual risk that one particular company might
present. You might miss some of the upside of a company like Celgene, but the
reduction in risk could be suitable for your portfolio.
For instance, Amlin Pharmaceutical
(AMLN) has dropped over 12% today in trading due to an FDA report on one of its
diabetes drugs. The ETF IBB has only fallen 1.3% and is not being widely
affected by the one member.
The Trade
Biotechnology
is one of the safe sectors that is not affected by the housing slump or the
credit crunch and is only mildly affected by the reduced GDP advances in America. IBB is
a position that should be built over a period of time on pullbacks and held until
one of its major trend lines is broken to the downside.