Healthcare funds see performance divergence
While healthcare has been one of the stand-out sectors since the start of the year, it has been important for investors to consider fund selection as there has been divergent performance between the individual funds.
Earlier this month, healthcare was named as the sector most likely to outperform in 2021 with 73% expecting stocks in that sectors to increase in value.
Using FE Analytics, there were four healthcare funds in the Australian Core Strategies universe; ETFS S&P Biotech, Platinum International Health Care, CFS Wholesale Global Health and Biotechnology and BetaShares Global Healthcare ETF Currency Hedged.
ETFS S&P Biotech returned 31.6% over one year to 30 October, 2020, while Platinum International Health Care returned 24.9%.
The ETFS fund aimed to provide investors with exposure to US biotechnology companies which were engaged in research and development of products based on genetic analysis and genetic engineering. With 124 equally-weighted holdings, ETFS said this reduced single-stock risk especially as biotechnology was a risky sector.
However, there were fewer returns for CFS Wholesale Global Health and Biotechnology and BetaShares Global Healthcare ETF Currency Hedged which had returned 10.1% and 2.3%.
The difference was even more pronounced since the start of the year with the ETFS and Platinum funds seeing double-digit returns while the BetaShares fund reported losses of 4.5%. The CFS fund saw returns since the start of the year of 2.8%.
AUTHOR
Laura Dew
Recommended for you
Women are expected to inherit US$124 trillion through the intergenerational wealth transfer, but Capital Group has found they are twice as likely to rely on social media for advice over a financial adviser.
Challenger Investment Management has raised $350 million during the offer period for its new ASX-listed investment structure.
A week after Lonsec downgraded multiple funds from Metrics Credit Partners, rival research house Zenith Investment Partners has opted to retain its ratings for the same funds.
Strong adviser engagement has helped Praemium reach $1 billion in inflows on its Spectrum offering, with a deal with Western Australian wealth firm Euroz Hartleys expected to add as much as $2 billion.
