Biotechnology Industry ETF

DEFINITION of 'Biotechnology Industry ETF'

An exchange-traded fund that invests specifically in the rapidly growing number of companies that combine biology and technology to develop innovative products and services. While products and services from such biotechnology companies are generally clustered in the area of healthcare, they may also be addressed at agriculture and the environment. As such, a substantial portion of a biotechnology ETF would consist of companies engaged in the development of drugs to combat various ailments.

BREAKING DOWN 'Biotechnology Industry ETF'

Depending on its size, a biotechnology company may have a number of products at various stages of development, ranging from initial feasibility to advanced clinical trials. As biotechnology stocks tend to be more volatile than the broad market, a biotechnology ETF would also exhibit similar volatile behavior.


By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs, you have to pay the same commission to your broker that you'd pay on any regular order

RELATED TERMS
  1. Biotechnology

    The use of living organisms to make products or run processes. ...
  2. ETF Of ETFs

    An exchange-traded fund (ETF) that tracks other ETFs rather than ...
  3. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  4. Oil Services Industry ETF

    A sector exchange-traded fund (ETF) that invests in companies ...
  5. Inverse ETF

    An exchange-traded fund (ETF) that is constructed by using various ...
  6. Stock And Warrant Off-Balance Sheet ...

    A financing option developed to help biotechnology companies ...
Related Articles
  1. ETFs & Mutual Funds

    IBB: iShares NASDAQ Biotechnology ETF

    Learn about the iShares Nasdaq Biotechnology exchange-traded fund, which offers one of the most diversified ways of investing in the biotechnology sector.
  2. ETFs & Mutual Funds

    A Quick Guide To Healthcare ETFs

    The healthcare industry offers a broad variety of sector ETFs but it’s difficult to avoid exposure to pharmaceuticals and biotechnology .
  3. ETFs & Mutual Funds

    BIS: ProShares UltraShort Nasdaq Biotech ETF

    Learn more about an innovative inverse-leveraged sector exchange-traded fund, or ETF, the ProShares UltraShort Nasdaq Biotechnology fund.
  4. ETFs & Mutual Funds

    FBT: First Trust NYSE Arca Biotech ETF

    Learn more about the First Trust NYSE Arca Biotechnology Fund, a highly rated exchange-traded fund in the biotech space.
  5. ETFs & Mutual Funds

    (XBI, FBT, IBB) 3 Bond ETFs in the Biotech Sector

    Learn about the top biotechnology ETFs, such as the SPDR S&P Biotech ETF, the First Trust NYSE Arca Biotech ETF and the iShares Nasdaq Biotech ETF.
  6. ETFs & Mutual Funds

    Technology ETFs to Date 2016 Performance Review (XLK, VOX)

    Exercise caution before buying shares of a biotech ETF based on a belief that the biotech sector will follow the broader tech sector to December’s levels.
  7. ETFs & Mutual Funds

    UBIO: ProShares UltraPro Nasdaq Biotech ETF

    Obtain information about an ETF offerings that provides leveraged exposure to the biotechnology industry, the ProShares UltraPro Nasdaq Biotech Fund.
  8. ETFs & Mutual Funds

    BBP: BioShares Biotechnology Products ETF

    Learn more about the BioShares Biotechnology Products fund, an exchange-traded fund that is focused on producers of FDA-approved drugs.
  9. ETFs & Mutual Funds

    3 Popular Healthcare ETFs in 2016 (XLV, IBB)

    Find out which health care exchange-traded funds (ETFs) are the most popular in 2016 based on their numbers of assets under management.
  10. ETFs & Mutual Funds

    The Top 5 Biotechnology Mutual Funds for 2016

    Explore detailed analyses of the top biotechnology-related mutual funds for 2016, and learn about the characteristics of these funds poised for a rebound.
RELATED FAQS
  1. Which other sectors benefit the most from advances in biotechnology?

    Find out how the pharmaceutical companies can benefit from advances in biotechnology with both investors and FDA approval ... Read Answer >>
  2. What is the difference between a biotechnology company and a pharmaceutical company?

    Make better investment choices by discovering the difference between biotechnology and pharmaceutical companies, including ... Read Answer >>
  3. What companies are positioned to grow from the popularity of ETFs? (VHT, DSUM)

    Discover reasons for the growing popularity of exchange-traded funds (ETFs) and some of the types of companies benefiting ... Read Answer >>
  4. Why would a growth investor purchase shares of companies in the drug sector?

    Learn why growth investors looking to beat the market gravitate toward the drugs sector, particularly the newer, high-tech ... Read Answer >>
  5. What exactly is an ETF portfolio?

    Learn what exchange-traded funds (ETFs) are and their advantages to investors, what a portfolio of ETFs is, and discover ... Read Answer >>
  6. Besides stocks, what other asset classes can I invest in through ETFs?

    Discover the extremely far-reaching range of investment asset classes that are available to investors through exchange-traded ... Read Answer >>
Hot Definitions
  1. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  2. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  3. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  4. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  5. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
  6. Weighted Average Life - WAL

    The average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, ...
Trading Center