This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Biotech Funds: Enter With Care

Take the (FBIOX) Fidelity Select Biotechnology fund. It has the lowest expense ratio, 0.97%, of the 10 funds and a better performance for the year to date, last three years and past five years. The five-year return is a loss of 0.21%, but that's up against the average loss of 1.33%.

Manager Rajiv Kaul ran the Select Biotech during the late 1990s, when the fund exploded higher under his tenure. However, when he assumed control of two midcap growth funds, his performance was unimpressive. One fund badly trailed its peers, and another simply matched the performance of those in its category, according to Morningstar.

Kaul has decreased his exposure to some of the largest holdings in Select Biotech while spreading the wealth around to some smaller names such as Myogen (MYOG), which makes therapies for cardiovascular disease.

Despite the manager's track record in nonbiotech funds, Fidelity's offering is probably the best of the group because of its low cost and manager's experience.

Unfortunately, the other decent funds have sky-high loads or minimum investments. (ETHSX) Eaton Vance Worldwide Health Science sports a 5.75% load and a 1.56% expense ratio, meaning you would need to be a long-term holder to make this one worth your while. Over the past five years, the fund has gained 3.06%. Only three out of eight funds with five-year track records have advanced over that time period.

The Eaton Vance fund is 70% invested in biotech, and the rest is in pharmaceutical makers like Novartis (NVS) and Schering-Plough (SGP).

The key to Eaton Vance's success is manager Sam Isaly, who heads Orbimed Advisors. Isaly has been investing in health care companies for nearly four decades. He runs hedge and private equity funds along with the Eaton Vance fund. While allocating his share of assets to the large-caps such as Amgen and Genentech, the manager prefers to invest in smaller names that may not even have products in the marketplace.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AMGN $159.60 0.00%
GILD $103.42 0.00%
NBIX $40.92 0.00%
AAPL $127.20 0.62%
FB $81.09 -0.15%

Markets

DOW 18,135.72 +38.82 0.21%
S&P 500 2,101.04 +2.51 0.12%
NASDAQ 4,982.8090 +15.6680 0.32%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs