5-Star ETFs Poised to Pop: iShares Nasdaq Biotechnology

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the iShares Nasdaq Biotechnology Index (NAS: IBB) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at the iShares Biotech ETF and see what CAPS investors are saying about the ETF right now.

IBB facts


February 2001

Total Net Assets

$1.23 billion

Investment Approach

Seeks investment results that correspond generally to the price and yield performance of the Nasdaq Biotechnology Index.

Expense Ratio


1-Year / 3-Year / 5-Year Annualized Returns

10.6% / 9.8% / 5%

Top Holdings with High CAPS Rating (4 or 5 stars) and Portfolio Weight

Amgen (NAS: AMGN) (8%)

Celgene (NAS: CELG) (6.3%)

Gilead Sciences (NAS: GILD) (5.2%)


SPDR S&P Biotech (NYS: XBI)

First Trust NYSE Arca Biotech (NYS: FBT)

Sources: Morningstar and Motley Fool CAPS.

On CAPS, 95% of the 161 members who have rated the iShares Biotech ETF believe the ETF will outperform the S&P 500 going forward. These bulls include headyinvestor and Mary953.

A couple of months ago, headyinvestor tapped the iShares Biotech ETF as a timely bargain opportunity: "Biotech is getting crushed on the de-leveraging squeeze. Sure financing will be tougher, but innovation will lead to growth."

The iShares Biotech ETF in particular sports an attractively low annual turnover ratio of 13%. That's much lower than other biotech ETF plays like SPDR S&P Biotech (74%) and First Trust NYSE Arca Biotech (35%).

CAPS member Mary953 elaborates on the bull case for the iShares Biotech ETF:

My choices in Biotech are an absolute disaster. Nonetheless, I realize that the sector has some wonderful successes and the needs of the boomer generation plus some "newly discovered" illnesses require new medicines. That makes Biotech a sector to have a presence in.

What do you think about the iShares Biotech ETF, or any other ETF for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional ETFs is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to trackiShares Nasdaq Biotech?Add it to your watchlist.

At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Gilead. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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