Three Top Ways to Trade Biotech Heading into 2023

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FILE PHOTO: Bottles of medications line the shelves at a pharmacy in Portsmouth

Investors may want to keep an eye on the biotech boom.

For one, the sector is still one of the safest, most recession-proof investments around.   Two, an aging population is demanding better treatment in an effort to live longer lives. Three, there’s the incredible new innovation in gene therapies, immune-oncology, precision medicine, machine-learning drug discovery, and treatments for unmet medical needs.  All of which are attracting millions of investors into the red-hot biotech space.

Some of those investment dollars are coming from the Biden Administration, for example.

As noted by Wiley.law:

“President Joe Biden signed Executive Order 14081 that will build on and expand biotech-promoting policies of the Obama and Trump Administrations. President Biden’s September 12 Executive Order, Advancing Biotechnology and Biomanufacturing Innovation for a Sustainable, Safe, and Secure American Bioeconomy (EO 14081), is intended, inter alia, to “accelerate biotechnology innovation and grow America’s bioeconomy across multiple sectors, including a range of industries, including health, agriculture, and energy.”

With that, here are five ways to invest in the biotech story.

SPDR S&P Biotech ETF (XBI)

One of the best ways to diversify at less cost is with a biotech ETF, such as the SPDR S&P Biotech ETF (XBI).  With an expense ratio of 0.35%, the ETF offers exposure to the S&P Biotechnology Select Industry Index. Some of its top holdings include Biogen, Veracyte, Moderna, Gilead Sciences, Amgen, and Ver Biotechnology to name a few.

iShares NASDAQ Biotechnology ETF (IBB)

Other top biotech ETFs include the IBB ETF, which holds dozens of stocks, including Amgen, Vertex, Gilead Sciences, Illumina, Regeneron, and Biogen to name a few.  The IBB, which has an expense ratio of 0.44%, last traded at around $133.

ProShares Ultra NASDAQ Biotechnology (BIB)

Or, look at the Ultra NASDAQ Biotechnology ETF (BIB).  With an expense ratio of 0.95%, this $59 ETF holds stocks such as Codiak Biosciences, Tonix Pharmaceuticals, Molecular Templates, and Applied Therapeutics.