Healthcare and Life Science Funds and ETFs

Healthcare stocks usually provide a defensive posture to a stock portfolio. SMID biotech stocks have been in a bear market since late 2021 but they are coming back since late 2023. So the weighting of large cap biophharma determined its performance. MedTech has lagged since the pandemic but has improved in 2024 (ABT,BSX, SRG,SYK). Of course if you did not overweight the QQQ or Mag 7 stocks since early 2023 you underperformed the market. Note that over one year the S&P 500 returned 19.75%. For longer term performance a portfolio should have balance of large cap biopharma and MedTech, but volatility is expected. You can expect to get good performance by holding two funds or ETFs like the XLV with the FSMEX or PRHSX.

  1. Almost all Life Science and Healthcare funds held UNH as a top pick and or an overweight.
  2. Many funds peaked in Q4 or November of 2021.
  3. Funds have been recovering only since 10/23 with lows hit in Q3 2022.
  4. The XBI is for traders favoring a bull market and is a momentum indicator (watch MACD) for biotech.
  5. Weak performance of the Russell 2000 and small caps correlate with biotech sector (IBB).
  6. Among holdings large cap biopharmaceuticals outperformed especially with obesity drug (GLP-1) companies LLY NOVO.
  7. A you may know mutual funds distribute taxable dividends of shares late in the calendar year.

QQQ v XLV vs IBB weekly charts .


FUND Ticker 2/4/24 1 yr 5yr % Top Holdings YTD % HIGH Date
Fidelity Sel Biotech FBIOX 10.08  


6.55 ABBV, AMGN, KRYS, REGN, VRTX, ALNY 2.58 28.03 12/6/20
Fidelity,Sel Medtech FSMEX 64.74 0.62 9.67 BSX, DHR,TMO, SYK, PEN, ABT, ISRG, 0.62 89.16 8/30/21
Janue Henderson,LifeSci JFNAX 69.92 7.3 12.43 UNH, LLY, NOVO, AZN, MRK, SAN.PA 7.3 75.99 11/7/21
T.Rowe Price Hlth Sci PRHSX 90.88 3.08 11.49 UNH, LLY, TMO, ISRG ,ELV, MRK 3.39 117.14 8/22/21
Black Rock Hlth Sci SHSAX 68.47 3.57 10.27 UNH, LLY, ABBV, BSX, MRK, AMGN 4.69 80.58 6/27/21
Healthcare Select SPDR XLV 142 8.47 11.46 UNH, LLY, JNJ, MRK, ABBV, TMO, ABT 4.11 143.4 4/3/22
iShares Biotech IBB 134.6 -1.66 7.27 VRTX, AMGN, REGN, GILD, IQV, BIIB, MRNA -0.92 176.02 8/30/21
SPDR S&P Biotech XBI 87.65 7.5 4.44 CYTK, KRTX, ACAD, BHVN, FOLD–equal wt* -1.48 174.79 1/31/21

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