Biotech ETFs Led the Way in July
By Tom Lydon | July 31, 2008 | 5:42 PM | 0 Comments
We're well past the halfway point of the year, and things are already looking different as far as exchange traded funds (ETFs) go.
For one, oil has been heading south for most of July. In fact, it closed the month at $124.08 a barrel, losing 11.4% since its closing price of $140 in June.
For another, gas has been on a downtrend, as well. It closed June at $4.086 a gallon, and closed $3.909 a gallon in July. It's not bargain-basement, but it's looking a little better for anyone who makes regular stops at the gas pump.
Looking at the top five ETFs for the month, you'll start to see a trend emerge:
• iShares MSCI Turkey Investable Market Index (NYSE: TUR), up 35%
• SPDR Biotechnology (NYSE: XBI), up 17.7%
• Merrill Lynch Biotech HOLDRs (NYSE: BBH), up 17.2%
• First Trust Amex Biotech Index (NYSE: FBT), up 15.8%
• Merrill Lynch Regional Bank HOLDRs (NYSE: RKH), up 15%
For a year that so far has been heavily dominated by commodities, there are some pleasant surprises in here. The biotechnology sector, in particular, has been a ray of light in the markets and the sector has strong momentum. It has applications that range from not only finding cures to diseases, but it could help solve the global food crisis.
• Biotechnology could help raise crop yields or produce crops in regions that are less fertile;
• Inventing flood-resistant rice or virus-resistant papaya and increased use of genetically modified crops could help solve the food shortage crisis;
• Infectious disease is gaining more attention as diseases develop antibiotic resistance; advancement in the sciences could prove beneficial in stopping the spread of disease
As evidence of the vast applications of the biotechnology sector, a roundtable conference was held to address the food crisis in sub-Saharan Africa. In Nigeria, agricultural growth is put at 4.5%, far below the growing demand for food there. The Minister of Science and Technology Chief called for increased use of genetically modified crops, which are being developed by the National Biotechnology Development Agency, All Africa reported earlier this month.
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