@scott oh, stop with the maybe-baby "forward p/e" crap. You know it is predictive of nothing; you're just pumpin' your book, aren't you? :)
Personally, I share a lot of what I do on this board and when I do, I give reasoning. I do own GILD and other healthcare stocks and a few differerent funds. As for GILD in particular, you have a company that had $24.9B in revenue in 2014, a 127% increase over 2013. Starts a dividend soon, $1
5B buyback, has a significant pipeline and yet, is trading at a 13 p/e. I think the current valuation is cheap and discounts a lot of the pipeline. It is likely in part to the idea of competition and pricing for their HEP-C treatments coming down, but Abbvie's competing Viekira Pak has been disappointing in terms of numbers and in terms of pricing coming down (also partly due to controversy over prices, although the question becomes how much would a liver transplant be), I think that's largely been discounted already.
I don't think there is that much genuine value in the market, but that's an example of something that I personally see as a pretty terrific value. Plus, the CEO won M*'s CEO of the year last year, although I'm still not sure whether or not to see that as a good or bad thing. I was impressed with how Gilead handled the Express Scripts move to the cheaper Abbvie product, and added on that downturn and have continued to add.
I actually think the large cap biotechs are still a good choice for those who can tolerate day-to-day volatility. They held up nicely in 2008, as well. As I've said, I do think a lot of the smaller biotechs have rallied on the promise of their pipeline and that's why when dealing with this sector, I'd rather either pick specific stocks or have actively managed funds or both instead of an index.
Lastly, I continue to like health care from the standpoint of I tend to focus investments on needs instead of wants. I sleep better at night with investments that at least heavily lean towards things people need versus things where I have to worry about what may be "the next big thing".
As for the E.R. of this fund, given the shorting and leverage, coming from another company this kind of fund could easily have an E.R closer to 1.7
5-2. I'm not saying that it's not inexpensive in a general sense, I'm saying that it could easily be more expensive, given what it is.
