The Invesco Nasdaq Biotechnology ETF (NASDAQ:IBBQ) is an exchange-traded fund (ETF) that primarily invests in the securities that make up the underlying index. This index is a modified market capitalization weighted index, which means that the companies with the largest market capitalization have a greater influence on the index's performance.
The underlying index is compiled by Nasdaq, a well-established stock exchange, and is designed to track the performance of biotechnology and pharmaceutical companies listed on the Nasdaq Stock Market. These companies can range in size from large-capitalization to small-capitalization, providing a diverse range of investment opportunities.
As a non-diversified fund, the Invesco Nasdaq Biotechnology ETF may invest a significant portion of its assets in a smaller number of securities, which can result in higher volatility. However, this also allows the fund to focus on a specific sector and potentially benefit from the growth and innovation in the biotechnology and pharmaceutical industries.
The fund's investment strategy involves investing at least 90% of its total assets in the securities that comprise the index. This means that the fund will closely track the performance of the underlying index, providing investors with exposure to the biotechnology and pharmaceutical sectors.
The Invesco Nasdaq Biotechnology ETF is classified as a Health ETF, which means that it is focused on investing in companies that are involved in the healthcare industry. This can include companies that are developing new treatments, medications, and medical devices, as well as those that are providing healthcare services and products.