Best Sector ETF Of Q3 And Its Top-Performing Stocks

The biotech sector led the U.S. stock market higher last quarter with Virtus LifeSci Biotech Clinical Trials ETF (BBC - Free Report) topping the list of the best-performing ETFs, logging impressive returns of about 21.4%. BBC carries a Zacks ETF Rank #3 (Hold) with a High risk outlook.

The surge in the fund was largely driven by volatility and uncertainty, especially tensions between the United States and North Korea and Hurricane Harvey that led to a shift in investors’ sentiment to defensive sectors. These sectors generally outperform during periods of low growth and high uncertainty. Additionally, an uncertain Fed policy, Washington turmoil and fears over the implementation of President Donald Trump’s pro-growth agenda continue to raise the appeal for defensive stocks.

Apart from these, encouraging industry trends including the wave of mergers and acquisitions, an accelerated pace of innovation, promising drug launches, growing importance of biosimilars, cost-cutting efforts, an aging population, expanding insurance coverage, the growing middle class, an insatiable demand for new drugs, and ever-increasing health care spending are fueling growth in the sector.

Let’s take a closer look at the fundamentals of BBC and its performance.

BBC in Focus

This fund has a novel approach to biotechnology investing with exposure to companies that are in the clinical trials’ stage. This can easily be done by tracking the LifeSci Biotechnology Clinical Trials Index. BBC is a small-cap centric fund, having amassed $31.6 million in its asset base. It charges 79 bps in fees per year from investors and trades in light average daily volume of around 11,000 shares.

Holding 75 stocks in its basket, it is widely spread out across various components with each holding less than 3.2% share. Though most of the stocks in the fund’s portfolio delivered strong returns, a few were the real stars.

Below we have highlighted those five best-performing stocks in the ETF with their respective positions in the fund’s basket:

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Disclosure: contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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