Biotech stocks have been one of the hottest sectors of the market over the last several years and many exchange traded funds have benefitted greatly from their success.
The two largest ETFs in this space are the iShares NASDAQ Biotechnology ETF (NASDAQ: IBB) and SPDR S&P Biotech ETF (NYSE: XBI) -- which have similar underlying companies, but vastly different index construction methodologies.
IBB has nearly $5 billion invested in 123 individual companies that are market cap weighted. This means the companies with the largest market value, such as Amgen (NASDAQ: AMGN) and Biogen Idec (NASDAQ: BIIB), are the largest holdings. In fact, the top 10 holdings in IBB represent nearly 60 percent of the ...
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