Biotech Bull Market: Up 25.39% Over 2 Years With High Volatility 

XBI Outperforms Up 12% YTD; FBT is Comparable, IBB lags.

Three Funds did well in H1 2018 (7-9%).

Biotech stocks peaked in July 2015 and reached a bottom on 10/31/16 gradually clawing their way back to a level about midway between the highs and lows of the past three years.Biotech stocks have had an exceptional recent two months despite severe sell-offs in February and March.

Over the years we have provided performance data on leading biotech ETFs and life science mutual funds. Despite a choppy, volatile year in the market certain sectors have outperformed the S&P with the NASDAQ-100 (QQQ), semiconductors and biotech at the top. Small caps also did well with the Russell 2000 (IWM) up 7.42 % and the IJR up 8.66% in 2018.This trend has carried through from 2017 also a good year for biotech. As of 6/29/18 trading here is 2018 YTD performance for major ETFs that we follow:

  • XBI up 12.16 % to $95.11. This is our top pick in a bull market.
  • FBT up 12.39% to $140. Performance comparable to the XBI.
  • IBB up 2.86% to $109.82. Weighted toward well known large caps.
  • QQQ up 10.2% to $171.65. Large cap tech weighted.

Since May we developed a Mid-Cap watch list and you can review them here.

You can review the Raygent Biopharmaceuticals Portfolio in the top toolbar. The Top Picks recently were : Abbvie (ABBV), Amgen (AMGN), bluebird bio (BLUE), Foundation Medicine (FMI) and the SPDR S&P Biotech (XBI).

Life Science Mutual Funds: Focused in Biotech and Medtech

Here is the 2018 and 12 month performance* of some leading life science and biotechnology mutual funds:

Fidelity Select Biotechnology Portfolio (FBIOX) up 8.65% YTD,14.54% 1 Yr  Total Assets $11B. Top Five Holdings: AMGN,ABBV,BIIB,CELG,VRTX.

T. Rowe Price Health Sciences (PRHSX) up 7.75% YTD, 20% 1 Yr, Total Assets $12.13B.Top Five Holdings:UNH,VRTX BDX, ISRG, SAGE.

Franklin Biotechnology Discovery (FBDIX) up 3.36% YTD, -0.67% I Yr, $198% Total Assets $1.4B. Top Five Holdings: ALXN,CELG,VRTX,BIIB,ILMN.

Black Rock Health Sciences Opps (SHSAX) up 6.5% YTD, 7.8% 1 Yr, Total Assets $6.13B, Top Five Holdings: UNH, MDT,SYK, CGN,ABT.

Janus Henderson Global Life Sciences Fund (JFNAX)  up 9.16 % YTD, 13.69% 1 Yr, Total Assets $3.68B. Top Five Holdings: AZN,LLY,SHPG,SAN.PA,HUM.

*Performance data can vary slightly depending on source.

Summary: You can establish a core position in biotechnology/life sciences with one ETF and one mutual fund. Some of the funds above have more diversification into med-tech, healthcare services and large cap pharma.

  1. For a less volatile portfolio look at FBIOX and PRHSX.
  2. For trading and overweighting in small and mid-caps we pick the XBI.
  3. If you favor large cap biotech stocks the FBIOX outperforms the IBB. JFNAX is a good choice for global large caps.
  4.  Healthcare has lagged in 2018 with the XLV barely up 1 % YTD.
  5. QQQ is a good pick if you want large cap tech with some biotech.

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