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For Biotech ETFs, It’s All About U.S. Presidential Politics

Simply put, the iShares Nasdaq Biotechnology ETF (IBB) , which tracks the Nasdaq Biotechnology Index, and rival biotechnology exchange traded funds have been hampered by presidential politics this year, a theme that may not evaporate until after Election Day.

IBB, the largest biotech ETF by assets, is heavily allocated to the largest biotech names. For example, Amgen (AMGN), Gilead Sciences (GILD) and Celgene (CELG) combine for about a quarter of IBB’s weight.

Investors who are closely watching the presidential race will want to keep an eye on Democratic nominee Hillary Clinton in the coming months. If Clinton makes her way to the Oval Office and implements more regulation on pharmaceutical drug pricing, biotech companies may underperform the broader market.

Last week, Democratic presidential nominee, Hillary Clinton, put the...