Yvonne Jeng ’16 pitched the iShares Nasdaq Biotechnology ETF (IBB) to the Student Managed Investment Fund (SMIF) on March 8, 2016. IBB offers an extremely large and liquid coverage of the biotechnology space, and will reduce exposure to firm-specific risk. With 190 total holdings, IBB has the broadest number of holdings of any biotechnology ETF available. Yvonne cited room for increased diversification within the healthcare sector as well as room for improved returns relative to the portfolio’s positions in Celgene, Gilead, and the Health Care Sector ETF (XLV). IBB has a comparatively low P/E ratio and tracking error when compared to peer ETFs. In addition, IBB yielded outstanding five-year returns relative to competitors and represents our desired blend of large-cap positions within the S&P 500. The SMIF recognized the potential to be overexposed to Celgene and Gilead due to the fact that IBB holds large positions in both of those equities. As a result, the SMIF decided to sell the corresponding weighted shares of Celgene and Gilead in order to execute the position in IBB. This strategy maintained the desired level of exposure to the individual equities in the sector and allowed the portfolio to benefit from the diversification that IBB offers within biotechnology.