The pandemic spotlight thrusts the ultimate prize into view: an effective vaccine. America’s Moderna and Pfizer are going for gold in the clinical trials marathon alongside a cadre of global health giants. (Gilead, meanwhile, leads the antiviral sprint.) And in case a single vaccine won’t due, several countries have aligned with multiple manufacturers. But what does this mean for advisors?
Solid opportunities to invest in the biotech sector. With iShare’s popular IBB (tied to the NASDAQ Biotechnology Index) anchoring our comparison, VanEck Biotech ETF BBH emerges as an excellent alternative, beating out 127 peers with a strong Portformer Replacement Score of 77. Why? BBH provides improved returns, reduced risk, and 12 bps off the expense ratio—even though it languishes in IBB’s $10B AUM shadow. More, BBH provides better max drawdown protection. Explore more with our free trial.
To enrich the comparison, we add XBI (the SPDR version of the S&P Biotechnology Index) to the graphical analysis. XBI shows favorable appreciation over the other funds, but not without greater volatility and lower drawdown protection.
What We’re Reading
- The Twenty Dollar Bill – Blog post with modern parable from Larry Swedroe of Buckingham on efficient market theory hypothesis.
- A Lurking Tension Threatens to Break the Bond Market out of its Market Doldrums – Yield pressure and inflation concerns can possible generate a Treasury selloff this summer.
- Fee War Hit Its Limit with Fund that Paid You to Invest – Despite a trend of issuers slashing fees to attract asset flows, the zero-fee funds are hitting the wall.
- Billions Flow into Quant ETFs that Behave like the S&P 500 – Bloomberg article that highlights smart beta funds are not providing diversification benefits as touted leading to outflows.
- Buffets’ Disappearing Alpha – Why It Doesn’t Really Matter– Analyst dissects the performance of Berkshire Hathaway and despite lagging over the last 10 years, their long-term shareholders are staying with the program.
- Rebalancing Is Still Everyone’s Risk Management Strategy– Seeking Alpha article which discusses the benefits of rebalancing to managing overall portfolio risk.
- Christophe Barraud Does Not See a Economic Recovery/ Market Correction Soon– The world’s most accurate economic forecaster does not see a market recovery before 2022.
- Public Pension Funds Cost Matters with Closets Indexers – CFA blog post that shows data supporting that public pension funds are the highest cost closest indexers.
Our Top Posts
- [White Paper] Active Management Is in Trouble (Again)
- Portformer Performance During Market Correction
- Coronavirus Twitter Influencer Analysis
- Tactical Alert: Adjusting to ETF-ETP Fund Closures
Connect with Us
Hop on a quick, scheduled 15 min Zoom call with us and explore some new ideas about how to engage your clients and families.
Have a great week!
John DiBenedetto and the Portformer Team