5 Best-Performing Biotech Mutual Funds Of 2019
Zacks Investment Research | Jan 22, 2020 07:17AM ET
The biotechnology industry witnessed remarkable growth last year, owing to a series of mergers and acquisitions, initial public offerings, collaborative operations and new job additions in the space that boosted it throughout 2019. What’s more, the products and services offered by the industry are always in demand because of their nature, which makes biotech a lucrative investment space irrespective of market conditions.
Biotech Indexes Fare Well in 2019
The industry made headlines since the beginning of 2019, thanks to numerous mergers and acquisitions, and initial public offerings that kept the space in investors’ focus. Bristol-Myers Squibb’s acquisition of Celgene Corporation (NASDAQ:CELG) and Eli Lilly (NYSE:LLY) and Company’s acquisition of Loxo Oncology were some of the major deals that took place last year.
Second, the number of initial public offerings was also considerable. Biotech IPOs have been increasing steadily over the past few years. This is because biotech companies require significant financing, particularly as they advance their research. By going public, a significant portion of this much-required financing is taken care of. This also makes these biotech firms more visible for collaborations and acquisitions.
Strategic collaborations also surfaced as major game changers for the industry. Amgen’s collaboration with BeiGene and Biogen’s partnership with C4 Therapeutics were some crucial alliances last year.
Owing to these factors, major biotech ETFs and indexes performed impressively in 2019. Specifically, the SPDR S&P Biotech ETF (NYSE:XBI), iShares Nasdaq Biotechnology ETF (IBB), ProShares Ultra Nasdaq Biotechnology (BIB) and NASDAQ Biotechnology Index (NBI) gained 30.5%, 23%, 41.8% and 22.9%, respectively.
5 Top Biotech Mutual Funds
We have, therefore, selected five biotech mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (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: Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.