On the other hand these 2 stocks have been on a tear and despite a complete blowup in Biogen (BIIB) the ETF is performing well. Reason? DNA has been the subject of a takover bid, and a month ago had a big jump. It will actually be curious to see how the composition of this ETF changes once (if) DNA is acquired. But this doesn't suit our purposes.

Next, we'll look at First Trust Biotechnology's (FBT) top holdings as of June 30

1. Vertex Pharma (VRTX) 6.8%
2. Illumina (ILMN) 6.2%
3. OSI Pharma (OSIP) 6.2%
4. PDL BioPharma (PDLI) 5.8%
5. Amgen (AMGN) 5.7%
6. Cephalon (CEPH) 5.5%
7. Genentech (DNA) 5.5%
8. Genzyme (GENZ) 5.0%
9. Celgene (CELG) 5.0%
10. Gilead Sciences (GILD) 5.0%

We see a lot more diversification here and the top 10 holdings make up 56.5% of the entire ETF. Interestingly, Illumina (ILMN) - one of our holdings - is the #2 position even though it is not a drug company but a diagnostic / life sciences type of company. All the major players are represented here with Amgen, Gilead, Genetech, and Celgene. Frankly I know nothing about the top holding VRTX but the #3 holding OSIP is one of the names I've been thinking of adding to the fund over the past 3-4 months as the chart has been impressive- but while I've been "thinking" the stock has gained 50%+.