Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open.

Mutual fund invests in mostly the same stuff as ETF, but has much higher expense ratio? (biotech sector)
Index funds, like IBB, generally lack active management, which equates to lower expenses. This is simply because the target index, the NASDAQ Biotechnology Index in the case of IBB, is composed of known quantities. This means there won't be stock pickers or analysts constantly swapping holdings, increasing the turnover rate of the portfolio and increasing capital gains; costs that are offset by higher expense ratios in more actively managed funds.