It's been a good week for health-care funds.
This past week,
Johnson & Johnson's (JNJ Quote) first-ever AIDS treatment, Prezista, won entry for sale to the 27 European Union countries.
Merck (MRK Quote) announced the distribution of its AIDS drug Atripla to certain poor countries at cost, and Thailand, declaring an emergency, is breaking
Bristol-Myers Squibb's
(BMY Quote) patent on the HIV drug Sustiva to create a generic version.
Influenced in part by these announcements, the health care and biotech funds followed by TheStreet.com Ratings edged up a healthy 0.48% on average for the week. Similarly, the Amex Health Care Select Sector Index advanced 0.44%.
The fund scoring the highest efficacy in our weekly clinical trial was the
(FSHCX Quote)Fidelity Select Medical Delivery Portfolio (FSHCX), returning 3.32% for the five trading days ending Feb. 15.
The fund is highly concentrated, with a 20.6% holding in
UnitedHealth Group (UNH Quote), 6.6% in
Cardinal Health (CAH Quote), 6% in
Caremark Rx (CMX Quote), 5.8% in
McKesson (MCK Quote), and 4.6% in
Medco Health Solutions(MHS Quote).
To balance out double-digit losers such as
Imaging Dynamics (IDL Quote) and
Visicu (EICU Quote), Fidelity Select Medical Delivery's top gainers included
Carriage Services (CSV Quote) up 25.2%;
FTI Consulting (FCN Quote) up 16.1%; and
Stereotaxis (STXS Quote) up 13.0%.
Being relatively immune from broad economic conditions, Carriage Services announced expected earnings from its funeral home business well in excess of analyst estimates, burying CSV short-sellers.
Next on the list of top-performers is the
(LOGSX Quote)Live Oak Health Sciences Fund (LOGSX), which climbed 2.33%. The assets are allocated between biotech at 37%, pharmaceuticals at 34.5%, healthcare products at 20.6%, electronics at 5.7%, and healthcare services at 2.3%.
Medtronic (MDT Quote),
Teva Pharmaceutical (TEVA Quote),
Invitrogen (IVGN Quote),
Amgen (AMGN Quote), and
Waters Corp. (WAT Quote) are the five largest holdings. Two of those holdings, Invitrogen and Teva, jumped 10.2% and 7.1% respectively on good fourth-quarter results.
| Top-Performing Health Care and Biotech Funds* |
| Fund |
Ticker |
Rating |
One-Week Total Return |
| Fidelity Sel Medical Deliver |
FSHCX |
B- |
3.32% |
| Live Oak Health Sciences Fd |
LOGSX |
D- |
2.33% |
| Saratoga Health & Biotech-B |
SHPBX |
E+ |
1.94% |
| Aim Adv Hlth Science-A |
IAGHX |
D |
1.31% |
| Aim Global Health Care Fd-A |
GGHCX |
D- |
1.29% |
| T Rowe Price Health Sciences |
PRHSX |
C- |
1.28% |
| Amer Cent Life Sciences-Inv |
ALSIX |
E+ |
1.27% |
| Hartford Global Health-A |
HGHAX |
C- |
1.22% |
| Vanguard Health Care Fnd-Inv |
VGHCX |
C |
1.04% |
| Kinetics Medical Fund-No Ld |
MEDRX |
D+ |
1.03% |
| * All funds listed are open-ended funds. |
|
|
|
| Source: Bloomberg |
Highlighting the volatility of the health care sector, the best-performing fund from one month ago reversed course to top the worst-performing list. That fund, the
(BIPIX Quote)ProFunds Biotechnology UltraSector ProFund (BIPIX), lost 1.20%. The fund is 80% invested in biotech stocks, with 17.8% in pharmaceuticals and 1.8% in health care products. Amgen at 24.1%,
Genentech (DNA Quote) at 10.5%, and
Gilead Sciences (GILD Quote) at 7.6% make up the largest holdings.
But, two of the stocks that contributed to the down week were
Telik (TELK Quote) and
Enzon Pharmaceuticals (ENZN Quote). Telik lost 10.2% on news of corporate restructuring and a layoff of 25% of its workforce, and Enzon sank 4.5% with announced fourth-quarter losses.
The next fund on the list, the
(FBIOX Quote)Fidelity Select Biotechnology Portfolio (FBIOX), also absorbed the decline in Telik shares and took an even larger loss in
Momenta Pharmaceuticals (MNTA Quote). Momenta plummeted 32% after
Amphastar Pharmaceuticals and Teva Pharmaceuticals beat
Sanofi-Aventis' (SNY Quote) patent on Lovenox, an anti blood-clot treatment.
Momenta may now have to compete with these two companies on the generic form of Lovenox, eliminating its potential place as the sole generic provider, and cutting the potential profit margin on the drug.
Fidelity Select Biotechnology Portfolio is allocated at 58.4% biotech, 40.2% pharmaceuticals and 1.2% health care products with Gillead Sciences, Genentech,
Biogen Idec (BIIB Quote) and Amgen as the fund's largest holdings.
| Worst-Performing Health Care and Biotech Funds |
| Fund |
Ticker |
Rating |
Fund Type |
One-Week Total Return |
| ProFunds Biotechnology UltraSector ProFund |
BIPIX |
E |
Open-End |
-1.20% |
| Fidelity Select Biotechnology Portfolio |
FBIOX |
E |
Open-End |
-0.95% |
| Genomicsfund |
GENEX |
E+ |
Open-End |
-0.90% |
| Biotech HOLDRs Trust |
BBH |
D+ |
ETF |
-0.84% |
| Rydex Series Biotech-Adv |
RYOAX |
E- |
Open-End |
-0.79% |
| Allianz Rcm Biotechnology-D |
DRBNX |
E- |
Open-End |
-0.70% |
| Fidelity Medical Equip & Sys |
FSMEX |
D |
Open-End |
-0.29% |
| Allianz Rcm Glbl Hlth Care-D |
DGHCX |
D- |
Open-End |
-0.22% |
| Janus Aspen Global Life Sci-I |
JGLIX |
D |
Open-End |
-0.20% |
| Wells Fargo Adv Sp Hlth Sc-A |
WFHAX |
E+ |
Open-End |
-0.18% |
| Source: Bloomberg |
Last month in my article,
Revival for Health Care, Biotech, I warned that in this highly volatile sector, "the worst performers above could easily switch places with the best performers" with a stalemate on health care legislation in Washington, D.C.
The progress made by the Democratic-controlled U.S. House has been stalled in the U.S. Senate, aiding the flip-flop in direction for some of these funds. Both sides are digging in for a fight, so look for the volatility to continue.
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Kevin Baker
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