One area of the market where stocks can be found to produce 10x, even 20x returns, regardless of what’s happening elsewhere, is biotech. Looking at the performance of the past ten years, if the biotechnology industry were a sector, it would be the best-performing one. Over the past decade, biotech stocks have returned 524%. That beats every last sector, the broader healthcare sector, by 200 percentage points and nearly double the S&P 500’s total return in that same time frame.
There’s clearly money to be made in the discovery of new treatments for anything from the flu to cancer. But biotech stocks carry substantial risk. While positive data from a drug trial could send their stocks soaring, a setback or failure can crush their returns, making them complicated buy-and-hold investments.
Today we’re highlighting a rare, buy-and-hold biotech investment that provides ground-floor access to the innovators of tomorrow, along with their potential nose-bleed returns, while minimizing risk.
A company with 400 million ‘patents’
One company has quietly compiled more than 400 million official trade secrets.
Trade secrets are like patents in that they protect valuable and proprietary information…
But unlike patents, trade secrets take less time to register… and more importantly, they never expire.
Which is a huge advantage for this little-known company.
You see, this company is using these trade secrets to build the world’s largest “codebase,” which will bethe key to it becoming “America’s Next Big Monopoly.”
Not surprisingly, Wall Street is starting to take notice. And the smart money is already pouring in.
Tech investor Cathie Wood has invested over $80 million already, and Microsoft founder Bill Gates has invested as well.
Get the details here before this story hits the mainstream media.
Many biotech companies are reasonably small startups. This means if a successful product is developed (then revenues, then earnings), share prices can skyrocket. This can happen regardless of headwinds and hurdles that can arise for the overall market.
However, many investors who come to the biotech space to cash in on solid returns get burned by seemingly promising startups that only end up wasting investor capital on dead-end technologies. One solution for investors looking to gain access to companies at the forefront of innovation through a diversified basket of biotech names is the First Trust NYSE Arca Biotechnology ETF (FBT).
FBT gives exposure to the best in biotech through its focused yet diversified list of 30 names, including giants such as Moderna (MRNA) but also $5 billion Alkermes PLC (ALKS). Without a specific sector classification scheme, the fund’s broad exposure could include access to pharmaceuticals and medical technology in addition to traditional biotech.
FBT is one of a handful of biotech ETFs available, offering exposure to a corner of the market that can perform well during periods of consolidation and is capable of big jumps in the event of major drug approvals. FBT’s portfolio is somewhat limited, though its equal-weighted methodology ensures that assets are balanced across all components. That feature can be vital in the biotech space, where specific companies are capable of turning in significant gains over short periods.
First Trust NYSE Arca Biotechnology ETF (FBT) Data Summary
- Weighted Average Market Cap $28.94B
- Price / Earnings Ratio 41.7
- Price / Book Ratio 3.69
- YTD Daily Total Return -3.77%
- Yield 0.00%
- Expense Ratio 0.55%
- Net Assets 1.46B
- Number of Holdings 31
- Top Holdings BioNTech (BNTX), Exact Sciences (EXAS), Moderna (MRNA)