1/7/22…JPMorgan Healthcare Conference next week We will cover selected stocks . Watch key ETFs for trends: IBB, IHI, XBI, XLV. can small cap biotech rally? Even FBT 30 pts above its 3/20 lows?
Update-2 1/5/22…FED spook day. Biotech still looks risky to many investors. Omicron and inflation narrative dominates. “Old school Pharma winners-MRK PFE.
Update-1 1/4/02…Risk-off day for momentum driven tech stocks and speculative small cap growth. Biotechs still weak with ARKG and XBI both hit hard. Large cap value stocks in energy and financial leads in major rotation. healthcare sector lags with XLV down about one %. To get help for small cap life science stocks we may have to wait until virtual JPMorgan Healthcare Conference next week. Also watch out for pall of legislation talk on Medicare negotiating drug prices.
- Coronavirus plays are dead, omicron makes traders cynical : BNTX NVAX PFE QDEL etc.
- Large cap biopharma losers reversal?? AMGN BIIB BMY MRK
- UNH down over 2%.
Healthcare Stock Portfolio 2021 Year End Summary
- For a diversified stock Portfolio the XLV will give you good healthcare performance. Add IBB for more biopharma weighting.
- Speculative small cap biotech stocks were not a good play in 2021.
- For more healthcare diversification add Medtech with the IHI or FSMEX.
If you review the one year charts of each of the key positions below you will see that the volatility of each ETF was very high. For example even for the XLV you saw selloffs in early October and early December before a 24% gain was achieved. Also note that this is a model portfolio to help achieve gains with healthcare and biotech stocks only. The key takeaway is that biotech stocks as a group underperformed even though healthcare stocks did well primarily because of United Health (UNH) up 44%. Large cap biopharma did well also particularly our top picks: ABBV REGN and VRTX. But stock picking even among large caps had some laggards like: AMGN, BIIB, BMY and MRK.
Here is our last update on 12/29. Watch for momentum in XBI.
The allocation of healthcare in the S&P is currently 13.5%. The healthcare component (XLV) of the S&P 500 is currently up 24% while the S&P 500 (SPY) was up 27%.
You can review the key ETFS and positions below keeping in mind that they do not cover individual stocks and trades. We do mention recent trades and picks in our weekly posts.
- Non-traders can achieve a good return in healthcare with two ETFS , the IBB and XLV, depending on your allocation of each. The XLV outperformed the DOW but not the QQQ nor the SPY.
- This year was a tough year for small and mid-cap biotechs as shown by the XBI. We only trade the XBI because of volatility but over two years as you can see the returns were 48-21=27% or 13.5% /year. The ARKG did worse in 2021 down 33%. These ETFs hold many well known speculative growth stocks.
- We added IWM to the portfolio because this ETF can correlate to biotech mid and small cap growth stocks.
- Our favorite fund is the T.Rowe Price Health Sciences Fund but it was up only 5% due to volatility of individual stocks. (Check with Fund on-line as performance may be better) We will review holdings at a later date.
- We added iShares US Medtech (IHI) at mid-year and it is up 21%.
- Weighting is for guidance only and not quantitative. Disclosure Long IBB, IHI, PRHSX, UNH. And large cap biopharma ABBV, BMY, MRK, PFE,REGN,VRTX etc. Trading long XBI.
|Stock/ETF||Ticker||Price||Wgt||11/27||Price||Price||1 year||High P|
|10/25||%||12/31||% Perf||12/31/22||% Perf||2021|
|iShares NAZ Bio||IBB||136||25||143.22||151.5||25.7||152.62||0.75||176.81|
|iShares Russell 2k||IWM||163||10||184.37||196.4||18.3||222.45||13.46||244.45|
|Merck*||MRK||80||5||79.86||81.77||-10||76.64||-1.81||90.54||PFE for ’22*|
|SPDR S&P Bio||XBI||117||5||131.46||140.8||48||111.96||-20.5||175|
|T.Rowe Hlth Sci||PRHSX||99.65||104||5.29||117.14|
|iShares U.S MedT||IHI||50||15||54.83||65.85||21.4||67.29|