Biotech ETF Sell-Off Could Create Opportunities

The biotech industry has experienced quite the reversal over the past few months. After posting some of the strongest gains in the S&P 500, biotech stocks fell dramatically from their highs in mid-July to make new reaction lows. The iShares NASDAQ Biotechnology ETF ( IBB B+ ) has fallen nearly 11% over the past month, compared to a 3% gain in the S&P 500. Although, its 52-week return remains at 12.10% compared to a 2.40% return for the S&P 500. Similarly, the SPDR S&P Biotech ETF ( XBI B ) is trading 14.26% lower over the past month but is still up 24.83% over the past 52-weeks, outpacing the benchmark S&P (see Figure 1).