Biotech stocks are growing popular while the coronavirus outbreak continues. Some investors think that it’s wiser to sink the money in such stocks, but analysts have different opinions on the subject. While the creation of a vaccine and then selling it could cause the shares to skyrocket, sometimes shareholders don’t gain much.
Daniel Ward, a famous biotech analyst, compared the performances of all biotech companies that had started to develop a vaccine against Ebola in 2015. He discovered that if equal amounts invested in each of these companies, an average investor would have lost money. However, there were also such stocks, which managed to skyrocket, but not all were in for massive gains.
Analysts say that investing in small companies proves very profitable in the long term. But they also caution that when the stimulators are short-term events, the rally is often fleeting and the risks higher.
Lots of biotech companies believe inventing a coronavirus’ vaccine a good opportunity to gain. However, investors are not the only party interested in this case. The authorities of different countries also provide funding for those companies, which are working on a vaccine.
However, there are several stocks, which the experts recommend due to their ability to create medicine against the virus.
Is iShares Nasdaq Biotechnology a Good Choice?
Analysts believe it is. Though there are lots of Biotech stocks, they are quite confident that iShares Nasdaq Biotechnology has a real potential to benefit from the development of a vaccine.
Furthermore, ETF invests in large-cap health care stocks. The iShares Biotechnology fund’s big name-holdings have lots of trials in the last stage. So, even if they fail to make a vaccine, the stock could still profit due to the other projects.
However, analysts caution that there is always a risk while investing. That’s why they advise taking into notice the FDA’s recommendations, as well as its evaluations of the companies’ projects.
- Trading Instrument