The iShares Nasdaq Biotechnology Fund (IBB) is one of the more active ETFs, often exceeding one million shares traded in a day and averaging about 500,000 shares per day. While 500,000 shares in this day and age of two-billion-share days on the Nasdaq does not seem like much, it ranks IBB as a highly-active favorite in the ETF world.

IBB makes a good, volatile alternative to the technology sector funds because it does not necessarily trade along with the rest of the tech sector. Interestingly enough, it doesn't even trade very closely with its healthcare cousins either -- the Pharmaceutical HOLDR (PPH), the Healthcare SPDR (XLV) or the iShares Dow Jones Healthcare Fund (IYH). In fact, IBB trades more closely with the Nasdaq Composite than it does the former two funds. It does closely track the Biotech HOLDR (BBH) with a 94% correlation. This is due in large part to the fact that its largest holding, Amgen accounts for more than 1/3rd of BBH's value (Amgen accounted for 19.15% of IBB as of March 31st, 2003).

As you can see from the chart above, IBB certainly offers a plethora of trading opportunities. After nearly doubling from its July 2002 low, the fund tumbled more than -10% in the past two weeks before bouncing substantially. If you can manage to stay on the right side of the trade, IBB certainly offers lots of opportunity.