Biotech sector sees momentum through clinical trials and M&A

The biotechnology sector is experiencing increased momentum, driven by merger and acquisition activity and positive clinical trial results, such as news regarding a skin cancer vaccine trial.

Investors looking for biotech exposure can choose between different fund methodologies. The State Street SPDR S&P Biotech ETF (XBI) offers broad exposure with 155 holdings and a lower expense ratio of 0.35%. It has recently seen bullish momentum, outperforming the XLV and SPY.

In contrast, the First Trust NYSE Arca Biotechnology Index Fund (FBT) provides a more concentrated approach, holding only 30 companies on an equal-weighted basis. While FBT has a higher expense ratio of 0.55%, it has shown different volatility profiles and historical growth patterns compared to the more diversified XBI.