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Can Biotech ETFs Gain From Positive Booster Update?

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Investors and vaccine makers like Moderna MRNA and Johnson & Johnson JNJ have reasons to cheer the latest update concerning the application of COVID-19 booster shots. In an effort to combat the coronavirus outbreak and accelerate the distribution process of extra doses in the United States, the FDA has approved the vaccine booster shots produced by Johnson & Johnson and Moderna.

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As mentioned in a CNBC article, the regulators have also given permission for “mixing and matching” vaccines. This will enable Americans to opt for a booster shot from a different developer than the one who came up with the initial doses.

In this regard, FDA Commissioner Dr. Janet Woodcock said that “Today’s actions demonstrate our commitment to public health in proactively fighting against the COVID-19 pandemic. As the pandemic continues to impact the country, science has shown that vaccination continues to be the safest and most effective way to prevent COVID-19, including the most serious consequences of the disease, such as hospitalization and death,” as mentioned in a CNBC article.

The FDA’s approval followed recommendations for the booster shots of the vaccines from the agency’s Vaccines and Related Biological Products Advisory Committee in the previous week. According to a CNBC article, Moderna’s booster dose has been recommended for the elderly and at-risk adults post six months of completely taking their primary series of shots. Moreover, Johnson & Johnson’s boosters have been recommended for those 18 years and above and have received their initial shot at least two months earlier.

The final decision lies in the hands of the Centers for Disease Control and Prevention and its vaccine advisory committee. On Thursday, a meeting is scheduled to discuss Moderna’s and J&J’s booster data and take a final call on the matter. If the committee recommends the booster shots, then the distribution will begin immediately.

It is worth noting that almost more than 15 million people have been administered with J&J’s shots and more than 69 million people have been fully immunized with Moderna’s vaccine, per a CNBC article.

Biotech ETFs to Watch out for

The pandemic triggered a race to introduce vaccines and treatment options, opening up investment opportunities in the biotech sector. Against this backdrop, let’s look at some popular biotech ETFs that investors can keep an eye on:

VanEck Biotech ETF BBH

The underlying MVIS US Listed Biotech 25 Index tracks the overall performance of the companies involved in the development and production, marketing and sales of drugs based on genetic analysis and diagnostic equipment. Its AUM is $573.9 million and it has an expense ratio of 0.35% (read:  Take a Look at the Top-Performing Biotech ETFs YTD).

iShares Biotechnology ETF IBB

This fund seeks to track the investment results of an index composed of U.S.-listed equities in the biotechnology sector. IBB has AUM of $10.11 billion with an expense ratio of 0.45% (read:  How Are Biotech ETFs Reacting to These Q2 Earnings Releases?).


The fund seeks daily investment results, before fees and expenses, which match the S&P Biotechnology Select Industry Index. Its AUM is $6.76 billion and its expense ratio, 0.35% (read: Stocks to Correct 5-10% in 2021? Buy These ETFs).

First Trust NYSE Arca Biotechnology Index Fund FBT

The fund replicates as closely as possible, before fees and expenses, the price and the yield of the NYSE Arca Biotechnology Index. Its AUM is $1.78 billion, while its expense ratio is 0.55%.

Principal Healthcare Innovators Index ETF BTEC

This fund invests in companies leading the charge by developing innovative solutions rather than spending money on marketing and distribution. It tracks the Nasdaq Healthcare Innovators Index. BTEC charges 42 basis points in annual fees and has AUM of $135.4 million.

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Johnson & Johnson (JNJ): Free Stock Analysis Report
Moderna, Inc. (MRNA): Free Stock Analysis Report
iShares Biotechnology ETF (IBB): ETF Research Reports
SPDR S&P Biotech ETF (XBI): ETF Research Reports
VanEck Biotech ETF (BBH): ETF Research Reports
First Trust NYSE Arca Biotechnology ETF (FBT): ETF Research Reports
Principal Healthcare Innovators Index ETF (BTEC): ETF Research Reports
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