As the market continues to improve, investors are taking on more risk, which is good news for biotech ETFs, Zacks writes.

Biotech is a high growth sector that is seeing some momentum and performing better than broader health care sector funds. The average outperformance of the biotech ETF sector over the broader health care market has been 800 basis points.

The biotech sector could eventually benefit from Obamacare, as it won't have to deal with taxes regarding medical device space and biotech drugs are likely to be used by a large portion of insured Americans.

Biotech companies are also well positioned as takeover targets as they are small mid cap companies. Zacks suggests Market Vectors Biotech ETF, iShares Nasdaq Biotechnology ETF [profile] and First Trust Amex Biotechnology Index Fund [profile]. 

Edited by: Casey Quinlan


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