Barclays to Launch Nasdaq Biotech Index ETF


Barclays Global Investors (BGI) is planning to launch an iShares Nasdaq Biotechnology Index Fund, an exchange-traded fund (ETF) that will hold all 76 securities in an index that contains companies primarily engaged in biomedical research to develop new treatments or cures for human disease. The Nasdaq Biotech Index debuted November 1, 1993.

The new fund will trade on the American Stock Exchange (AMEX) under the symbol IBB, joining the Nasdaq-100 Index Tracking Stock (trading symbol: QQQ) to become the second ETF based on a Nasdaq index. The expense ratio for this fund will be 0.50%, and BGI has announced February 2, 2001 as the tentative launch date.

Nasdaq announced changes to the Biotech Index that are effective today, January 23, 2001. The index now has 76 securities - previously the index was comprised of 184 biotech companies. In a statement released yesterday, Nasdaq said it is undertaking the index changes "to support a variety of new financial products."

The chart below shows monthly historical performance (since December, 1994) of the Nasdaq Biotech Index, Biotech HOLDRS Trust, AMEX Biotech Index, and the S&P 500 Index.

: Reuters

BGI is also planning to launch an iShares Cohen & Steers Realty Majors Fund, the first open-ended Real Estate Investment Trust (REIT) exchange-traded fund. The fund will hold all 30 REITs in the modified cap-weighted index that seeks to track the performance of the U.S. real estate market. The expense ratio for the fund will be 0.35%. It will trade on AMEX under the symbol ICF, with a launch date sometime in February 2001, according to BGI. Cohen & Steers Capital Management, Inc. is the largest real estate securities manager in the United States.