Biotech - Vaccine Testing

Biotech or BUY-o-tech? | 19 July 2020

Weekly Update

The pandemic spotlight thrusts the ultimate prize into view: an effective vaccine. America’s Moderna and Pfizer are going for gold in the clinical trials marathon alongside a cadre of global health giants. (Gilead, meanwhile, leads the antiviral sprint.) And in case a single vaccine won’t due, several countries have aligned with multiple manufacturers. But what does this mean for advisors?

Solid opportunities to invest in the biotech sector. With iShare’s popular IBB (tied to the NASDAQ Biotechnology Index) anchoring our comparison, VanEck Biotech ETF BBH emerges as an excellent alternative, beating out 127 peers with a strong Portformer Replacement Score of 77. Why? BBH provides improved returns, reduced risk, and 12 bps off the expense ratio—even though it languishes in IBB’s $10B AUM shadow. More, BBH provides better max drawdown protection. Explore more with our free trial.

To enrich the comparison, we add XBI (the SPDR version of the S&P Biotechnology Index) to the graphical analysis. XBI shows favorable appreciation over the other funds, but not without greater volatility and lower drawdown protection.

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John DiBenedetto and the Portformer Team

John DiBenedetto

Sales | Business Development | Customer Success

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