Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

3 Top-Performing Biotech Funds For 2020

By Zacks Investment ResearchStock MarketsFeb 19, 2020 05:04AM ET
www.investing.com/analysis/3-topperforming-biotech-funds-for-2020-200508537
3 Top-Performing Biotech Funds For 2020
By Zacks Investment Research   |  Feb 19, 2020 05:04AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

The biotechnology industry did well remarkably throughout the last year and is likely to continue with the momentum this year. Of course, factors such as mergers and acquisitions, collaborative operations, initial public offerings and substantial job additions to the industry drove the impressive performance in the past year.

In light of the above underlying factors steadily boosting the biotechnology industry, mutual fund investors could consider investing in the space at present.

Biotech on Solid Footing

Biotechnology industry has been in focus since the beginning of this year, following the outbreak of the new epidemic in China. As the death toll in the Asian country continues to climb alongside the number of the infected, investors veered their attention to biotechnology firms that have the potential to come up with a cure for the deadly disease.

In addition, several interesting deals promise to boost performance of the overall industry in the long run. Just last year, Bristol-Myers Squibb’s acquisition of Celgene Corporation (NASDAQ:CELG) and Loxo Oncology’s buyout by Eli Lilly and Company (NYSE:LLY) made headlines among the 12 megadeals inked in the industry. Abbvie and Allergan’s $63 billion worth merger also kept investors asking for more.

Moreover, biotech IPOs have been going strong since the start of 2019. Black Diamond Therapeutics, which went public in January, rose 108% on its first day. Last year, as many as 52 biotech firms went public, witnessing a first-day gain of 16%, on average.

These factors are pushing major biotech indexes and ETFs ahead. To be specific, the SPDR S&P Biotech ETF (NYSE:XBI), iShares Nasdaq Biotechnology ETF (IBB), ProShares Ultra Nasdaq Biotechnology (BIB) and NASDAQ Biotechnology Index (NBI) have gained 13.4%, 9.9%, 13.7% and 9.8%, respectively, in the past year.

3 Best Biotech Fund Choices

We have, therefore, selected three mutual funds that invest in biotech firms, all of which carry a Zacks Mutual Fund Rank #1 (Strong Buy). In addition, the minimum initial investment for these funds is within $5,000.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.

The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Fidelity Select Biotechnology Portfolio (FBIOX) aims for capital appreciation. The fund invests the majority of its assets in companies that are engaged in the research, development, manufacture and distribution of several biotechnological products and services etc that benefit considerably from scientific and technological advancements in biotechnology. FBIOX is a non-diversified fund that invests in U.S. and non-U.S. issuers alike.

This Zacks sector – Health has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FBIOX carries a Zacks Rank #1 and has an annual expense ratio of 0.72%, which is below the category average of 1.24%. It has returned 15.1% over a year. The fund has no minimum initial investment.

Franklin Biotechnology Discovery Fund Class A (FBDIX) invests the majority of its assets in securities of biotechnology companies and discovery research firms. The non-diversified fund mostly invests in equity securities. FBDIX aims for capital appreciation.

This Zacks sector – Health has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FBDIX carries a Zacks Rank #1 and has an annual expense ratio of 1.02%, which is below the category average of 1.24%. It has returned 12.8% over a year. The fund has a minimum initial investment of $1000.

Alger Health Sciences Fund Class A (AHSAX) seeks long-term capital growth. The fund invests the majority of its assets in securities of companies that are engaged in various activities in the health sciences sector. AHSAX invests across all market capitalizations and may also invest in foreign securities.

This Zacks sector – Health has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

AHSAX carries a Zacks Rank #2 and has an annual expense ratio of 1.15%, which is below the category average of 1.24%. It has returned 8.9% over a year. The fund has a minimum initial investment of $1000.

Want key mutual fund info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week.

Get it free >>



Get Your Free (FBIOX): Fund Analysis Report

Get Your Free (FBDIX): Fund Analysis Report

Get Your Free (AHSAX): Fund Analysis Report

Original post

Zacks Investment Research
3 Top-Performing Biotech Funds For 2020
 

Related Articles

3 Top-Performing Biotech Funds For 2020

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email