Biotech ETFs May Soon Face Challenges


The Republican takeover of the House this week could have a negative impact on biotechnology exchange traded funds (ETFs) .

Kenneth Chang for The New York Times reports that research and development at nonmilitary agencies - including those that sponsor science and health research - would fall 12.3 %, to $57.8 billion, down from President Obama's requested $65.9 billion for fiscal 2011. [ Biotech ETFs Readying to Deliver the Goods. ]

Other agencies that would be impacted:

  • The National Institutes For Health would lose $2.9 billion, or 9% of funds.
  • The National Science Foundation would lose 19% of their budget, or more than $1 billion.
  • The National Oceanic and Atmospheric Administration would lose $324 million, or 34%.

Democrats could try to push the budget bills through Congress before the Republicans take power in January, but there are not enough votes for a Senate filibuster. Stem cell research would take a back seat, which has been in flux since a federal judge ruled in August that any federal financing violated a Congressional ban against the destruction of embryos for research. [ 5 Things That Drive Biotech ETFs. ]

To be alerted to any shifts in the biotech sector, sign up for our email alerts , which will notify you of any trading activity.

  • iShares Nasdaq Biotechnology ETF ( IBB )
  • SPDR S&P Biotech ETF (NYSEArca: XBI)
  • First Trust NYSE Arca Biotech ETF (NYSEArca: FBT)

Tisha Guerrero contributed to this article.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , ETFs

Referenced Stocks: IBB

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