I've noticed that this sector hasn't been discussed on this board for several months due to Hillary's 2015 tweet and continued possible government intervention in this sector. I've also noticed that Health Care funds have received "a shot in the arm" recently i.e. their performance has been good. Notably Fido Select Health Care (FSPHX), Fido Biotech (FBIOX) and Price Health Sciences (PRHSX). I'm considering buying a health care fund and would like to hold it for as long as possible, which does depend a great deal on government action or inaction regarding this sector.
1. What do people think of this sector for the next year and further into the future?
2. Opinions on FSPHX, FBIOX and PRHSX? FBIOX scares me however due to its volatility.
3. Is PRHSX open to new investors? M* indicates that it's open, but I thought it was closed.
4. Wait until Trump's fixation with changing/repealing Obamacare has settled?
5. Any other suggestions & comments would be most welcome.
Thanks in advance for any and all comments!
Comments
Regards,
Ted
http://money.usnews.com/funds/mutual-funds/rankings/health
PRHSX was closed when I was reshuffling my portfolio, but now open to investors; but I am good with the trio of VGHCX, FSPHX and FBIOX. FBIOX is most volatile of the lot, so if there is any need to sell, it will be the first to go.....and VGHCX will be the last to go. Also, rounding this group is POAGX (which has ~30% in Healthcare but currently closed).
ACA repeal will be only for short-term reaction to the sector. On the flip side, the President has also vowed to revamp FDA so drugs can come to market faster. A lot of "issues" in this sector (regardless of regulation, innovation and pricing are big factors for the sector).
Some of the regulations only transfer "power" between the sub-sectors (sub-sectors: traditional Pharma, Biotech, Payers (Managed Care companies), Distributors, etc). For example, ACA and pricing "gave" the Payers more leverage recently. On that note, I think PRHSX may be the most diversified of the lot, VGHCX and FSPHX are broadly diversified and FBIOX is the most concentrated. .
I have had VGHCX and FSPHX for a long time (not selling them), and I bought FBIOX early last year when it was down big (I may sell soon). All of them are still lower compared to their 2015 highs.
But I will wait for the "correction" to buy. Look forward to other comments.
I own PSPHX. It's a good broad sector fund. It's a fund I will own for a long time. I added to it last year only to see it sink lower each time. As far as FBIOX, you will either be smiling or crying with this puppy, so I say use mad money for this fund. PFHAX did ok at the time everything was going up, so how could you lose? But I like PSPHX better. Also you could look up JAGLX....it also was a very good fund. They changed managers so I'm not sure how they're doing. As for the future, I can only say government and baby boomers---my view. They're the drivers. I also saw a piece on CNBC yesterday that basically said, with the high deductible and co-pays, nobody's in a hurry to change things 'cause you're paying the bill. Just saying......
Right now, I'm waiting for something out of D.C. before I buy more healthcare.
God bless
The Pudd
You are so right. I need to stop longnecking and start proofreading more. With FBIOX you are also right. I can't take the pain so now I stay away. FSPHX is also at a 52-week high right now.....just saying.....I guess most things are. I'm going to ramble now about something said long ago by a human resources person that I went to school with. He said the company would give you a set amount of $$ and you put it into what you want or what matters the most to you. Like healthcare.....a good plan or eye care or dental or life insurance or the 401......whatever you wanted most. It never happened but what a novel idea. You could build your own benefit plan to your needs.
God bless
the Pudd
Just curious...why do you think that HC funds dipped last year, and then rebounded just recently?
I also own HQL, which is a Life Sciences closed-end fund, because they have private equity investments. Tekla has 4 closed-end funds with slight differences, such as a bigger focus on income, broad healthcare, life sciences and global, that have been discussed here occasionally if not recently so you could search for those discussions if you're interested. If you're just looking for general healthcare exposure I'd probably stick with one of the 3 mutual funds but if your interests are more specific then one of Tekla's offerings might be interesting.
Finally, I have a small position in SBIO, which is a small cap offering of biotech companies that have drugs in Phase 2 or 3 clinical trials and have enough cash to last them for 24 months. This is just as volatile as FBIOX and often more volatile so you either have to be a big believer, like loving roller coasters, or you have to trade the volatility in order to tolerate the craziness.
@ PRESSmUP - Looking at the chart for FSPHX, this fund tanked in the latter quarter of 2015 after Hillary's tweet. Looks like this fund churned for much of 2016, with a rise and fall during 2016. 2017 seems to have seen a rebound, at least thus far.
I went back 10 pages of MFO (early Jan) and couldn't find a thread about health care funds, thus a lack of interest in what seems to have been a beaten down sector. This year FSPHX (and other health care funds) are seeing an uptick, yet still below their 2015 highs. This is what sparked my interest in this sector.
Regards,
Red
Hoping all is well at the A-squared household. Sure you're teaching the children well...as in, an equity is, a bond is......the markets fluctuate, but.........
Okay, I'll provide a few "are you sh*t'in me data points for broad healthcare.
>>>FSPHX and PRHSX from 1-4-99 thru 1-4-2008 (9 months before the full equity market melt)
---FSPHX return = 61% annualized with all distributions = 7.6%
---PRHSX return =161% annualized with all distributions = 20%
NOTE: from the end of December, 2007 thru March of 2008 healthcare had a hit of about -20% and then moved sideways until the full market melt in mid-Sept. of 2008
http://stockcharts.com/freecharts/perf.php?FSPHX,PRHSX&l=0&r=2262&O=111000
>>>FSPHX and PRHSX, 1-4-2008 thru 3-4-2009 (market melt equity bottom, eh?)
Both down about 40% during this time period. Healthcare was already moving to the downside long before the Sept. 2008 blowup.
>>>FSPHX and PRHSX from 3-9-2009 (end of equity market melt) thru 3-3-2017 (now)
---FSPHX return = +431% annualized with all distributions = 54%
---PRHSX return = +508% annualized with all distributions = 63.5%
http://stockcharts.com/freecharts/perf.php?FSPHX,PRHSX&n=2010&O=111000
>>>Last five years via M*, including the Ms. Clinton comments about taking healthcare/pharma "down". Click onto the 5 year to sort return list. Five year health category average = 17.6%
http://news.morningstar.com/fund-category-returns/health/$FOCA$SH.aspx
As to the future directions....well, forces are pushing from many directions and there will likely be the continued swings in this equity sector. As to the challenges for the political faces portion, is part of this "lobby" link. One might presume that the big monies will continue to "talk", eh?
https://www.opensecrets.org/lobby/top.php?indexType=i
Now on the personal and sometimes scary side for this house, is at this time 67% of all invested assets are in equity with 80% U.S. and the other 20% mostly in Europe. Direct healthcare invests are FSPHX, PRHSX (before closed to us) and FHLC (Fido etf). With the other mutual funds, etf's or index funds; a M* snapshot indicates that 41% of our equity is in U.S./global healthcare. The majority of the monies being in the direct investments. These holdings placed a damper on our 2016 returns, but has us at 6%k YTD, thanks to the recovery in this sector. Keeping the faith at this time for this sector. Active traders are having even more fun; but this house doesn't play in the short time areas very much anymore; but attempt to watch for signs of sector "sickness".
Lastly @PopTart , I do believe PRHSX is available to those within some retirement plans or direct investors with the company, but as you know, not via Fido. Also, the better of these two mutual funds was PRHSX. Within the past several years, even prior to the manager change at PRHSX, FSPHX was traveling a very similar path for returns. Your having direct access to FSPHX should more than cover this area. You may also choose to review some of Fido's other health/medical related select funds. And keep in mind that you likely already have a decent amount of healthcare inside of broad based mutual funds or indexes.
I've tried my best to recall and submit everything I thought about earlier today to reference your post. I'm going to take another check of links and data to help eliminate any mistakes. Questions?
Take care,
Catch
Kiddos are doing well but are too young to understand about investing. They've been fixated on popsicles all winter (we don't know why) and have begun to share my love for Pop Tarts! So many new flavors of Pop Tarts compared to when I was their age.
Thanks again for your post and I hope that you and your family are doing well!
BCSIX not only has a nice portfolio of Small Cap HC, but a large inventory of SC Tech. Combine this with a long history of great management makes this fund a keeper, but you already knew that.
Thanks for pointing out this fund to the thread.
You may choose to mix and match then, eh? As I noted, both funds are running similar returns to one another during the past 5 years or so. Of course, everyone must determine their own comfort level with any of this; and in particular, what percentage of a sector holding is of value to be meaningful to an overall portfolio. Our measure here has been that anything less than a 10% holding may not provide enough "bump". 'Course, the same thought applies to the downside, too.
Dollar cost averaging, which most encounter during a working career determines a method for attaining a percentage goal for any holding.
But, you're investing while young; and that is the overwhelming wonderful.
Take care,
Catch
I always dca into funds. Hopefully time is on my side ...
I think PRHSX is open again. It had closed for a year or two, as I recall. I had a decent position built, but sold it for political considerations. Not sure if I'll go back into that or Vanguards - I need to review their allocations. I do hold Tekla monthly-income healthcar CEFs in my Roth IRA though.
At the internal Fidelity page for PRHSX, this fund is noted as "closed to new investors" in RED.
The below link is a snippet of the most current holdings info for FSPHX.
https://fundresearch.fidelity.com/mutual-funds/composition/316390301
Maybe closed at Fido ... but TRowe's main fund page says "Open to new Retail investors / Open to subsequent Retail investments"
https://www3.troweprice.com/fb2/fbkweb/snapshot.do?ticker=PRHSX
Yes, to your note.
I'm sure there are also a number of retirement plans that continue to have this offering, too.
Currently I'm in consumer staples, utilities and healthcare. Use profunds so no trading fee issues. FWIW.