For investors seeking momentum, State Street SPDR S&P Biotech ETF XBI is probably on the radar. The fund just hit a 52-week high and has risen 85.43% from its 52-week low price of $66.66/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook to get a better idea of where it might head:
XBI in Focus
The underlying S&P Biotechnology Select Industry Index represents the biotechnology sub-industry portion of the S&P Total Markets Index. The Biotech Index is a modified equal weight index. The product charges 35 bps in annual fees (See: All Health Care ETFs).
Why the Move?
The biotech market has regained momentum lately, driven by favorable regulatory developments and cheaper valuations. The Fed’s rate cuts have also improved funding conditions and the increasing adoption of AI in U.S. healthcare continues to provide a meaningful tailwind for the sector.
More Gains Ahead?
Currently, XBI has a Zacks ETF Rank #3 (Hold) with a High risk outlook. However, it might continue its strong performance in the near term, with a positive weighted alpha of 42.55 (as per Barchart.com), which gives cues of a further rally.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
