One of the sectors that I think has the best growth potential right now is biotechnology. There are a number of exchange-traded funds (ETFs) that let you invest in biotechnology stocks and I recommended one to my Successful Investing subscribers in March that has performed well.

The ETF that I recommended is the iShares Nasdaq Biotechnology Index Fund (IBB). The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of companies primarily engaged in the biotechnology industry, as represented by the NASDAQ Biotechnology Index. The index contains securities of NASDAQ-listed companies that are categorized according to the Industry Classification Benchmark as either biotechnology or pharmaceuticals.

While many individual biotech companies have seen their stock price drop, IBB saw its price rise 14.83% in 2010. There’s an old saying on Wall Street that goes, “There’s always a bull market somewhere.” Well, that saying is true, and biotechnology is outperforming the overall market. As of yesterday’s close, IBB was up nearly 8.79% for subscribers to my Successful Investing newsletter.

The fund’s top holdings do not include a single pick that forms more than 7.27% of the portfolio, so it spreads its risk well among a number of investments. The top 10 holdings, as of April 19, were: Amgen Inc., 7.27%; Teva Pharmaceuticals, 5.32%; Celgene Corp., 5.21%; Gilead Sciences, 5.04%; Pharmasset Inc., 4.40%; Alexion Pharmaceuticals, 4.21%; Vertex Pharmaceuticals, 4.11%; Perrigo Co., 3.55%; Biogen, 3.51%; and Illumina, 3.49%. As of April 19, the fund is diversified in the following sectors: biotechnology, 65.30%; pharmaceuticals, 34.67%; and S-T securities, 0.5%.

For advice about which ETFs to buy and to sell, I urge you to sign up for my ETF Trader service. As always, I am pleased to answer any of your questions about ETFs, so don't hesitate to contact me if you have one. To send a question to me, simply click here. You may just see your question answered in a future ETF Talk.