Earnings Avalanche Looms for Biggest Biotech ETF

ETF Trends

Amgen (AMGN), Biogen (BIIB), Gilead Sciences (GILD) and the other marquee biotechnology names have already delivered quarterly earnings, but this still promises to be an epic week on the earnings front for the iShares Nasdaq Biotechnology ETF (IBB) .

IBB allocates over 40% of its combined weight to Gilead, Celgen (CELG), Amgen, Biogen and Alexion Pharmaceuticals (ALXN). Although those companies have already reported, more than 24% of the Nasdaq Biotechnology Index, IBB’ s underlying index, reports this week. [Technical Take on the Big Biotech ETF]

Regeneron (REGN) is the largest IBB constituent reporting this week. The company steps into the earnings confessional Thursday. Regeneron is IBB’s sixth-largest holding at a weight of almost 4.1%. Jazz Pharmaceuticals (JAZZ) is the second-largest IBB holding reporting. IBB allocates 1.98% to Jazz, making it the ETF’s 12 th -largest holding, according to iShares data.

Overall, 64 of IBB’s 122 members deliver results this week with the earnings deluge for the ETF coming just as the fund has been showing some signs of life.

IBB and its rival biotech ETFs have been among the poster children for the lost momentum trade. For its part, IBB has tumbled almost 16.2% since February 25, a decline that was arguably hastened by talk of biotech bubble. [Investors Leave Once Beloved Health Care ETFs]

As investors fled IBB and other biotech ETFs, the coverage given to rough patch hit by these ETFs, not surprisingly, outweighed what was afforded the funds on the way up. After all, IBB was one of the top-10 non-leveraged sector ETFs in 2011, 2012 and 2013, a factoid that has not received much attention.

More importantly for those focusing on IBB right here, right now, the aforementioned earning report will arrive with the IBB in the midst of a solid stretch of performance.

Quiet as it has been kept, IBB is up 5.3% since April 15. Throw in Monday’s 1.2% gain and that jumps to a 6.5% gain in just over two weeks. Over the past week, investors have poured nearly $246 million into IBB.

iShares Nasdaq Biotechnology ETF

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ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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