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Fidelity Advisor Biotechnology

Fidelity mutual funds 401(k)The biotech industry is particularly exciting to investors because it often includes smaller companies that can run off huge returns on just a single product approval. Plus, these companies sometimes become targets for larger pharma players that are having difficulty replenishing their product pipelines through R&D, and thus resort to buyouts instead.

One of the biggest beneficiaries of the overall success of the industry is the Fidelity Advisor Biotechnology (FBTAX) fund, which has gained an impressive 36% for the year-to-date, has averaged 12% gains in the past five years and has consistently beaten its benchmark since inception.

Portfolio manager Rajiv Kaul is an expert in the biotech field. He has a deep understanding of the intricacies of the clinical trials process and understands the huge potential of market opportunities. But he also tries to reduce the risk levels by placing some of his focus on companies that already have cash flows from other drugs. This approach has helped minimize losses during volatile times, such as in 2008 when FBTAX only lost 11% — much better than many of its peers.

Current top holdings include larger biotech companies such as Gilead Sciences (GILD), Amgen (AMGN), Celgene (CELG) and Biogen (BIIG).

FBTAX’s A shares cost 1.27% in fees, as well as a maximum sales charge of 5.75%; other share classes’ fees and loads differ.

Article printed from InvestorPlace Media,

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