Everyday Finance

Will M&A Activity Boost PowerShares Dynamic Biotech & Genome ETF?

I agree that there will be continued play in the sector given the desperation of the majors to develop their own drugs internally to offset the massive patent expirations occurring over the next few years.

Interestingly, there's a pretty strong seasonality to the biotech sector and we're still in the trough. Generally such trends are spotted quickly and evaporate due to efficient markets within a couple years, but this one's still in place it seems (I had used BBH as my proxy due to longer tenure, but trade with XBI due to better representation of the sector and less reliance on AMGN, DNA).

The sector outperforms big time in the late fall/winter on a pretty routine basis:

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