Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
FBIOX, Fidelity's Select Biotechnology was a standout performer in the recent past but I have no idea where they stand today. Just wondering if you've also considered ETF's as a possibility. You might also look at some wide-mandated health care funds (e.g. PRHSX) to see if they may contain healthy slices of biotech holdings.
The health care sector has been hit or lots of misses for me over the years and I've settled on just one that I care to hold longer term - FSMEX.
Biotech stocks resemble a landscape filled with craters. The two ETFs that cover the sector, IBB and FBT, are hurting badly, YTD, 1yr or 3yr. FBIOX is down about 15% YTD while broader-based HC funds have not kept up with the stock market as a whole. I owned CELG until it was bought up by BMY which I kept for a while. The stock rose to nearly $70, but it now trades for about $53. At one time it was a M* 5 star pick, but it turned out to be a value trap. I feel lucky to have exited when I did. For a pure growth HC fund, BHCFX has impressed, but it’s volatile.
The biotech space is very volatile though one which I have involvement. As noted above, IBB and FBIOX are good choices which contain several well known and familiar names and with good overall portfolios. There are funds with a more clinical stage focus, such as ETNHX. I've owned that for about 6 years with good results, though it's not for the squeamish. As Mark noted, FSMEX is an excellent choice in the healthcare space. I swapped VGHCX for FSMEX last year, and frankly, should have done it years ago. That one's a Great Owl, and deservedly so.
Biotech stocks, not necessarily the technology itself, vastly outperformed the market and the healthcare indices from the GFC through 2015. Since then, it has been hard to make money consistently in the sector. I've tried, but not successfully. Cathie Wood has been burned on IONS, a stock I hope to see recover after tax-loss selling, but it's no sure thing. M* is very positive on the stock, rating it very undervalued. Same for INCY.
@Bobby: I think it's laudable to add to a fund that has been punished by fickle investors. I have a decent chunk in BHCFX, to which I've added this Fall.
The biotech CEF, HQL, has been pummeled with the assets declining to the point where the fund trades at a small discount, whereas it has traded at a usual discount of around 8%. I see this discount shrinkage as quite unusual because it is not due to increased demand for the shares.
It’s not surprising that the whole biotech sector is under pressure when one its guiding lights really screws up. The report talks of 1000 layoffs at Biogen and great disruption. There’s a link in the report to an in depth published article on the debacle in STAT.
The Times reported on Sunday that a large chunk of the contemplated increase in Medicare Part B premiums is due to the projected cost of this new drug, which according to many, does not work.
PRHSX held 29.3% of its 200 name portfolio in biotech as of 09-30-2021.
I've owned the fund for a long time, and the key to me has been to buy it and forget it. An investment in a health sector fund is definitely a long term (10+ years) prospect.
Comments
The health care sector has been hit or lots of misses for me over the years and I've settled on just one that I care to hold longer term - FSMEX.
@Bobby: I think it's laudable to add to a fund that has been punished by fickle investors. I have a decent chunk in BHCFX, to which I've added this Fall.
The biotech CEF, HQL, has been pummeled with the assets declining to the point where the fund trades at a small discount, whereas it has traded at a usual discount of around 8%. I see this discount shrinkage as quite unusual because it is not due to increased demand for the shares.
https://www.wbur.org/news/2021/12/10/biogen-aduhelm-reckoning-alzheimers-drug
It’s not surprising that the whole biotech sector is under pressure when one its guiding lights really screws up. The report talks of 1000 layoffs at Biogen and great disruption. There’s a link in the report to an in depth published article on the debacle in STAT.
The Times reported on Sunday that a large chunk of the contemplated increase in Medicare Part B premiums is due to the projected cost of this new drug, which according to many, does not work.
I've owned the fund for a long time, and the key to me has been to buy it and forget it. An investment in a health sector fund is definitely a long term (10+ years) prospect.