NEW YORK ( SmartStops) -- Exchange-traded funds such as SPDR S&P Biotech ETF (XBI), the iShares Nasdaq Biotechnology ETF (IBB), the Biotech HOLDRs (BBH) and the iShares Dow Jones US Pharmaceuticals (IHE) have been affected in recent weeks by a significant uptick in mergers and acquisitions in the sector.This activity has been fueled by cash-heavy companies looking to diversify and broaden their horizons.
- SPDR S&P Biotech ETF, which allocates nearly 51.5% of its assets to small-cap companies and 30.75% to medium-cap companies, which are the most susceptible to M&A activity.
- iShares Nasdaq Biotechnology ETF, which tracks big players like Amgen as well as small and mid-cap stocks that are prime targets for M&A.
- Biotech HOLDRs, which predominantly allocates its holdings to large-cap companies such as Amgen, Gilead Sciences(GILD) and Biogen Idec Inc(BIIB). These are the likely acquirers in the sector.
- iShares Dow Jones US Pharmaceuticals, which includes drug giants Pfizer and Merck among its top holdings.