Biotech Goes Mainstream

A new exchange-traded fund focusing on biotech stocks will begin trading on the American Stock Exchange Friday, even though some fund watchers question whether now's the best time to delve into the sector.

The new ETF, the iShares Nasdaq Biotechnology Index Fund, will track the Nasdaq-traded companies that are engaged primarily in using biomedical research for the discovery or development of novel treatments and cures for human disease. The launch marks the second exchange-traded product to track the biotech industry, the first being the (BBH Quote)Biotech Holdrs, or Holding Company Depositary Receipts, which debuted in late 1999.

The new fund, which will trade under the ticker symbol IBB, is also the second ETF to be based on a Nasdaq index, following the wildly popular (QQQ Quote)Nasdaq-100 Index Tracking Stock, which accounted for much of the trading volume and assets on the Amex last year. ...