3 Top-Performing Health/Biotech ETFs

The sector rotation strategy to play at present is healthcare and biotechnology, and TheStreet.com Ratings has identified the three ETFs below. Investors should note that although these funds are classified in the health-care space, a large percentage of their holdings are in the pharmaceutical and biotechnology sectors.

Outstanding one-month and three-month returns are some of the best we have seen in any category of funds in our database.

Given the current bear market, these performances seem all the more outstanding. The question is whether the health-care and biotech sectors can continue to earn these well above market returns. It's probably unlikely -- but that doesn't take away the chance for a genuine buying opportunity at the first sign of a pullback. They may be priced a little high right now, so it may be best to wait for a fall in the price of the ETFs' shares as an entry point.

Health care, biotech and pharmaceuticals in particular are not bad sectors to be in as the economy continues to sour.

The holding common to all three ETFs, which carries a notable weighting, is Genentech(DNA Quote). The Biotech Holders Trust(BBH Quote) has 42% of its assets invested in this company.

Amgen(AMGN Quote) is common to two of the funds. Gilead Sciences(GILD Quote) is another holding that has performed well throughout 2008 and is common to two of the funds.

Fund Name	Ticker	TSC Grade	1 Month Return	3 Month Return
SPDR S&P Biotech ETF	XBI	B-	20.10	25.30
HOLDRS Biotech	BBH	C+	19.75	26.56
First Trust AMEX Biotechnology	FBT	C-	17.29	15.57