Growth-oriented investors often have to look high and low to find winners that will continue to outperform over long periods of time. Finding a sector, then, with similar characteristics can prove to be doubly challenging.
That said, the biotechnology industry is one which has traditionally provided a much more robust growth profile than other sectors due to the underlying risk-reward nature of the industry and the supply and demand fundamentals which have proven to be equally positive for firms in recent years.
One such exchange traded fund (ETF) which is expected to outperform other ETFs in the near to medium term is the iShares Nasdaq Biotechnology ETF (TSX:IBB).
Biotechnology stocks have been beaten up industry-wide, and as such, a number of analysts have pointed to the fact that, while volatile, in general biotechnology stocks tend to provide the greatest amount of growth in short amounts of time, especially following periods in which the sector has sold off.
As we are now in a period of time which may prove to be advantageous for aggressive investors looking for growth, I anticipate seeing an increased focus on health care and biotech names moving forward.
From a long-term perspective, it is hard to pick sectors outside health care and biotechnology stocks that will be able to provide greater long-term growth (well, perhaps technology).
For investors with a very long-term time horizon, getting in on a few sectors which are poised to continue to grow at relatively attractive levels today may be a prudent thing to do.
Invest wisely, my friends.
