InvestorPlace published an article last December about the seven hottest biotech stocks to own in 2023 and beyond. One of the seven was the SPDR S&P Biotech ETF (NYSEARCA:XBI). XBI tracks the performance of the S&P Biotechnology Select Industry Index which represents the biotechnology sub-sector of the S&P Total Market Index.
The S&P Biotechnology Select Industry Index and exchange-traded fund ETF are rebalanced four times a year. Based on the 133 holdings, each stock begins a new quarter with a weighting of approximately 0.75%.
In 2023, XBI is down 13% year-to-date (YTD), 31 percentage points worse than the S&P 500. Therefore, the best biotech stocks to buy are those with a weight closest to 0.75% as they should be neither hot nor cold heading into 2024. This list covers the top three biotech stocks to buy based on this measurement.
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