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Biotech ETF (XBI) Hits a New 52-Week High

Sweta Killa

For investors seeking momentum, SPDR S&P Biotech ETF XBI is probably on the radar now. The fund just hit a 52-week high and is up about 45.5% from its 52-week low price of $64.38/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

XBI in Focus

XBI focuses on the biotechnology segment of the U.S. market and offers equal-weight exposure across stocks. It is spread across various market spectrums, with 65% allocated to small caps, 20 to mid caps and the rest to large caps. The fund charges investors 35 basis points a year in fees (see: all the Healthcare ETFs here).

Why the Move?

The biotech corner of the broad healthcare sector has been an area to watch lately, given the astounding performance at the start of the fourth quarter. A slew of positive news, including study results, regulatory backdrop and deal activities, and better-than-expected corporate earnings have fueled the rally in the sector. Additionally, uncertainty over the trade deal added to the positives given that the sector is non-cyclical in nature, which provides a defensive tilt to the portfolio.

More Gains Ahead?

Currently, XBI has a Zacks ETF Rank #2 (Buy) with a High risk outlook, suggesting continued outperformance in the months ahead. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank. So, there is definitely some promise for those who want to ride this surging ETF a little further.

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SPDR S&P Biotech ETF (XBI): ETF Research Reports
 
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