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Consider Smaller Biotech ETFs as Big Pharma Goes Shopping in 2021

Consider Smaller Biotech ETFs as Big Pharma Goes Shopping in 2021 December 31, 2020 After a lull in mergers and acquisitions activity, Big Pharma could begin to use its cash stores to buy out smaller targets, potentially fueling the momentum in biotechnology-related exchange traded funds that target the small and mid cap segments. According to Dealogic data, total deal volume for the drug industry reached $253 billion globally in 2020, the Wall Street Journal reports. To put this number in perspective, the markets witnessed a record $432 billion in 2019. Observers attributed the slowdown in M&A activity to the onset of the coronavirus pandemic, along with election-related uncertainty over future regulatory outlook.

Biotech ETFs surge on vaccine rollout, Alexion-AstraZeneca tie-up

Biotech exchange-traded funds rallied Monday as the rollout of the coronavirus vaccine across America shed a bullish light on the industry. The First Trust NYSE Arca Biotechnology Index Fund FBJ jumped 4% by the afternoon, while the Defiance Nasdaq Junior Biotechnology ETF IBBJ, -1.01% and the SPDR S&P Biotech ETF XBI, -0.01% both gained 3.5%. The VanEck Vectors Biotech ETF BBJ, gained 2.7%, and the Global X Genomics & Biotechnology ETF GNOM, +1.29% was 2.3% higher on Monday but has gained the most - 56% - in the year to date among the funds noted here. FactSet data show that among all U.S. domiciled ETFs, the Van Eck fund has the most exposure to Alexion

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