Another intriguing small-cap biotech fund is the PowerShares Dynamic Biotech & Genome ETF (PBE), which like the BBC fund sports a 0.42 percent expense ratio. This fund was launched a decade ago to focus on both of those themes, and in its early years delivered tepid returns because the genomics revolution was slow to take root.
Yet the past few years have seen surging interest in DNA-focused drug development, leading to 25 percent annualized gains during the past three years. Considering we’re only in the middle innings of the biotech revolution, and in the early innings of the genomics revolution, this fund could flourish over the long haul.
More broadly, the key drivers that propelled biotech stocks to current heights remain in place as a broad range of treatments are being sought for cancer, Alzheimer’s disease, heart disease, and other illnesses. Investors may want to seek dual-pronged exposure to large companies with solid drug development pipelines, coupled with drug-development upstarts, through the purchase of these ETFs.