Is iShares Nasdaq Biotechnology Index Fund a Buy?
Exchange-traded funds, or ETFs, are one of the fastest-growing investment vehicles in the country. ETF assets have grown at an annualized rate of 25% over the past 10 years to over $4.3 trillion in total assets, according to Bank of America (NYSE: BAC) analysts. BofA projects that the asset total will surpass $5 trillion by the end of 2020. Over the next 10 years, BofA projects a 10-fold increase in assets to $50 trillion by the end of 2030.
That growth is "driven by a continued move to passive and increased awareness of the attractive tax efficiency, cost, liquidity and transparency characteristics of ETFs," wrote Bank of America analyst Mary Ann Bartels in December.
ETFs also provide investors with an opportunity to invest in a specific part of the market in a more diversified way. This is particularly relevant in more high-growth but riskier sectors, like biotech. If you're not intimately familiar with companies in this sector but are intrigued by their growth potential, an ETF like the iShares Nasdaq Biotechnology Fund (NASDAQ: IBB) might be an investment to consider.
Source Fool.com
