The Rayno LifeScience Biotech portfolio is up 11-15% YTD (15%+ with rebalancing as recommended). Among the big winners YTD are Regeneron (REGN) up 40%, Targacept (TRGT) up 880% and Inverness (IMA) up 72%. The portfolio included both biotech and diagnostic companies.
We reviewed five other ETFs and funds in the biotech space. The % performance may differ very slightly depending on how initial prices were calculated.
Fidelity Select Biotech Fund (FBIOX) up 5.7% Top positions Alexion(ALXN), Amgen(AMGN), Biogen(BIIB)
H&Q Life Science (HQL) up 4% Celgene(CELG), Amgen(AMGN), Biogen(BIIB)
iShares Biotech (IBB) up 17% Amgen(AMGN),Teva(TEVA), Gilead(GILD)
Power Shares Genomic and Bio(PBE) up 19.3% Millipore (MIL),Waters(WAT),Sigma(SIAL)
SPDR S&P Biotech (XBI) down 1% Alexion (ALXN),Celgene (CELG),HumG(HGSI)
Biotech slightly underperformed the S&P this year which was up about 19%. Large cap pharmaceuticals outperformed biotech this year up about 26% with the XPH. The healthcare SPDR XLV was up 18.5% YTD.
Some funds and ETF’s were hurt by overweighting in Genzyme (GENZ) which was down 28% YTD.
A less volatile strategy for investing in biotech would be to buy a mix of ETF’s and Funds being sure that you have diversification with diagnostics and tools.This is an approach used in the Rayno portfolio as well as PBE. Overweighting in large caps is also important to reduce the effect of binary outcomes with clinical trial results that are devastating with small cap stocks.
A more detailed review of strategy will be coming in late January with a new 2010 Life Science Portfolio.