- Last Ratings Update:09/30/2014
- Price as of 09/30/2014 :$22.10
- Net Assets:$331.7 Million
- Peer Rank:17 of 28
- Investment Rating:B+
We rate H&Q Life Sciences Investors at B+. This overall rating indicates it is among the top 10% of all closed end funds in its peer group. Positive factors that influence this rating include a well above average total return, low price volatility and low expense structure. The fund invests approximately 84% of its assets in stocks and may be considered for investors seeking a Sector - Health/Biotechnology strategy.
POSITIVES AND RISKS
Total return ranks very high in comparison with peers over the last three years. The H&Q Life Sciences Investors has returned an annual rate of 10.09% since inception. More recently, the fund has generated a total return of 29.09% in the last five years, 40.08% in the last three years, and 23.40% in the last year. How does that compare to other equity funds? In the last five years, it has outperformed 98% of them. It has also outpaced 97% of its competitors on a three year basis and 88% of them over the last year for the period ending 9/30/2014. On a year to date basis, HQL has returned 15.05%.
Downside risk has been below average. HQL has a draw down risk of -16.41%, which is the largest price decline experienced over the last three years. This fund has a three year standard deviation of 18.9%. This fund has experienced a high level of volatility in its monthly performance over the last 36 months. As of 9/30/2014, the fund was trading at a price of $22.10, which is 2.8% below its 52-week high of $22.73 and 2.1% above its 52-week low of $21.65.
High expense ratio hinders performance. On total assets of $331.70 million, HQL maintains a high expense ratio compared to its Sector - Health/Biotechnology peers of 1.47% to cover all operating costs. Brokerage costs for the fund to buy and sell shares are not included in the expense ratio. As HQL is a closed end fund, it has no front end or back end load.
Manager tenure and performance record are net positives. Substandard fund managers tend to be replaced, so a long tenure is usually a good sign that a fund is achieving its objectives. The H&Q Life Sciences Investors has been managed by Daniel R. Omstead for the last 22 years. Over that period, the manager was able to capture more actual gains in excess of the expected return than 97% of other fund managers.
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