Should You Invest in the iShares Biotechnology ETF (IBB)?

Core Viewpoint - The iShares Biotechnology ETF (IBB) is a prominent option for investors seeking exposure to the Healthcare - Biotech segment, offering low costs, transparency, and tax efficiency [1][2]. Group 1: Fund Overview - IBB is a passively managed ETF launched on February 5, 2001, with assets exceeding $5.47 billion, making it one of the largest in its category [3]. - The fund aims to match the performance of the Nasdaq Biotechnology Index, which includes securities from NASDAQ-listed biotechnology and pharmaceutical companies [3]. Group 2: Costs and Performance - The annual operating expense ratio for IBB is 0.45%, which is competitive within its peer group, and it has a 12-month trailing dividend yield of 0.29% [4]. - Year-to-date, IBB has gained approximately 1.45% but is down about 5.07% over the past year, with a trading range between $112.02 and $149.47 in the last 52 weeks [7]. Group 3: Sector Exposure and Holdings - IBB has a 100% allocation in the Healthcare sector, providing diversified exposure to minimize single stock risk [5]. - The top holdings include Vertex Pharmaceuticals Inc (7.96%), Amgen Inc, and Gilead Sciences Inc, with the top 10 holdings representing about 47.73% of total assets [6]. Group 4: Risk and Alternatives - The ETF has a beta of 0.75 and a standard deviation of 20.16% over the trailing three-year period, indicating a higher risk profile [7]. - Alternatives to IBB include the First Trust NYSE Arca Biotechnology ETF (FBT) and the SPDR S&P Biotech ETF (XBI), with respective assets of $1.03 billion and $4.65 billion [9].