In spite of the cold snap of Q1, the U.S. equity markets managed to deliver handsome returns last year. 2014 turned out to be the third consecutive year of double-digit percentage gains for the first time in more than two decades.
Not only did the markets manage to withstand the harsh winter weather during the first quarter, but they also sailed through geo-political tensions erupting worldwide, global growth concerns including a slowdown in developed markets like Europe and Japan and the oil price havoc (read:Best ETF Strategies for 2015).
While one might be wondering what secret cause led to the rally in the U.S. markets, it indeed was the strengthening economy itself. An improving job market, rising consumer confidence, better corporate earnings and lower interest rates were some of the factors that drove the U.S. markets higher.
While the S&P 500 (SPX) stock index closed the year with a little more than 11% gains, the tech-laden Nasdaq clocked gains of roughly 13.5% and the blue chip Dow Jones Industrial Average (DJIA) index rose 7.5% in 2014.
Though the broad market gains left winners in almost every corner of the U.S. economy, the Biotech sector stood out clearly as a star performer of the year. The NASDAQ Biotechnology index delivered a stellar 34% return in 2014 – emerging as the biggest winner among all the sectors.
Despite some temporary glitches and rough trading in between, encouraging industry trends, increasing merger and acquisition activities, several important product approvals and label expansions, ever-increasing health care spending and an aging population led the sector to easily outperform the broader U.S. equity markets (read: Buy These Top Ranked ETFs on Solid Biotech Stock Earnings).
Below, we have highlighted three ETFs from the biotech space that emerged as top winners. These products could continue with their strong run this year and are worth keeping an eye on to see if they can remain top performers once again:
First Trust NYSE Arca Biotechnology Index Fund (FBT – ETF report)
The fund rocked 2014 with a stupendous return of 67%. FBT manages an asset base of $2.1 billion and trades in good volumes of 185,000 shares a day.
FBT tracks the NYSE Arca Biotechnology Index to measure the performance of companies in the biotechnology industry that are primarily involved in the use of biological processes to develop products or provide services.
