Biotech General Discussion

TAKE HOME MESSAGE:

To make more $$ investing in smid-cap biopharma

incorporate top & consensus holdings of top biopharma hedge funds ("THTBHFs")

in your analysis and strategies

Last October we reported the start of a new BPIQ portfolio, called the BPIQ Hedge Fund Favorites portfolio, which commenced on April 1, 2023. The strategy for this portfolio is based on our anecdotal observations that THTBFs outperformed XBI. We are happy to report that our HFF portfolio is up 42.3% since its inception on April 1, 2023 (FIG. 1), considerably more than XBI’s 24.3% performance and IBB’s 5.5% performance since that date.

FIG. 1. Hedge Fund Favorites account performance printout from brokerage account

As we reported last October, we then back-tested different strategies based on top holdings of top biopharma funds and identified a number of strategies that consistently outperformed XBI. In our back-testing of strategies based on top holdings of top biopharma funds, although some strategies did not provide better returns than XBI, we identified a number of strategies that yielded positive returns over a 1 year through 5 year period (See our prior analysis), and provided much better returns than XBI. The performance of these best hedge fund favorite strategies was at least as good as our best-performing portfolio, our BPIQ Spread-the-Risk portfolio whose returns are shown in FIG. 2. Plus, the Hedge Fund Favorites strategy is much less time consuming and subjective to set and follow.

FIG. 2 % Returns of BPIQ Spread-the-Risk Account vs. XBI from different starting dates to 3/14/24.

Based on these observations and analysis, we updated our strategies for all of our portfolios in August and September 2023 to incorporate top holdings of top biopharma funds for at least a portion of the portfolio’s strategy. Since that time, all our portfolios have out-performed XBI and IBB (FIG. 3).

FIG. 3. % Returns of BPIQ portfolios vs. XBI to 3/14/24.

In our attempt to provide the most value to our Elite and Amp subscribers, we are providing access to our detailed holdings and trades for 3 of these strategies: Hedge Fund Favorites (Consensus) and Run-Up Plays for Elite subscribers, and Amp subscribers will in addition, get access to our Amp Core portfolio.

Our goal is to help as many investors as possible to make money investing in biopharma stocks. Just to be certain it’s clear, starting later this month, Elite subscribers will have access to the trade log and percent holdings of all tickers in the Hedge Fund Favorites (consensus) and Run-Up Plays portfolios, Amp subscribers will also have access to the Amp Core portfolio.

Next, be on the lookout for our post with more details regarding the strategies were are testing and making available. Plus, in the near future we plan to provide more ideas about how to use THTBHFs for your smid-cap biopharma analysis. In the meantime, if you are a current Elite or Amp subscriber, thank you for supporting our small business. If not, please consider signing up today. Our goal is to provide you with information that provides value to you, that far exceeds the cost of our subscription.

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Article history:

3/17/24 EJV

Disclaimer:

Not investment advice. Prior returns do not guarantee future returns. Do your diligence & seek professional advice before making investments.