To The Moon

iShares Biotechnology ETF $iShares Biotechnology ETF(IBB)$

Today’s recommendation would be iShares Biotechnology IBB ETF. IBB tracks an index of US biotechnology companies listed on the major US exchanges. This includes companies engaged in the research and development of therapeutic treatments but are not focused on the commercialisation and mass production of pharmaceutical drugs. This also includes companies that are engaged in the production of tools or systems that enable biotechnology processes.

When inflation is at a 40-year high of 8.6% as reported last week, investors would want to look for sectors that will still perform regardless of inflation or the dreaded R-word “recession”. The top ten assets under the biotechnology ETF are largely in the healthcare sector, and spending on healthcare does not cut down when times are bad. Some of the top ten in IBB include Amgen $Amgen(AMGN)$, Gilead $Gilead Sciences(GILD)$, Vertex, Regeneron, Moderna, Biontech $BioNTech SE(BNTX)$, and Mettler Toledo. The key statistics for IBB to take note are expense ratio of 0.45%, P/E ratio 12.11, P/B ratio 3.75, and equity beta of 0.78%. A beta of less than 1 indicates the security tends to be less volatile than the market.

From a technical perspective, looking at a monthly chart since 2010, the IBB ETF is moving in a general uptrend channel and has crossed below the 50 MA and 100 MA. From historical price movements, the IBB tends to rebound off these moving averages, although past performance is not an accurate predictor of future performances. Please invest with care and do your research before commuting to a decision.