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iShare NASDAQ Biotechnology Index (IBB)

Aug 18 2008

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.


    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.

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