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Number Cruncher

Top mutual funds investing in health care Add to ...

What are we looking for?

How the top health-care equity funds have performed in the past year.

The screen

We looked at the sector’s mutual fund and exchange-traded fund performance this year to March 31. U.S. dollar, segregated and duplicate versions of these investments were excluded.

What did we find?

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Momentum in the biotechnology space is attracting growth-focused investors to an asset class that was once sought mainly for its dividends and protection from volatile markets.

That’s certainly the case for CI Global Health Sciences Corporate Class, which claimed the top spot in the screen with a return of nearly 44 per cent for the year ended March 31. The fund has a broad mandate to invest in global companies that specialize in the health care or medical industries, but it is weighted heavily toward the United States.

“Really, if you’re looking for growth, you’re going to go to the biotechs,” said Andrew Waight, the fund’s manager. Among biotech stocks, the best established performers in Mr. Waight’s fund this year included Gilead Sciences Inc. and BioMarin Pharmaceutical Inc., which were up 100 per cent and 84 per cent, respectively.

Nearing its 17th anniversary, the fund has posted strong long-term returns, including the best 10-year return of the top one-year performers.

The Mackenzie Universal Health Science Class had the second-best one-year performance with a 33-per-cent return.

There were also two ETFs that popped up in the screen including the Canadian hedged iShares S&P Global Healthcare ETF, with a return of about 28 per cent, and the BMO Equal Weight U.S. Health Care ETF, which was up nearly 22 per cent.

But not all corners of health care are hot, Mr. Wait said. “Health care is very diverse. There are some areas where you just can’t find growth.” He said the more consumer-oriented businesses, such as hospitals, insurers and generic drug companies, have been struggling.

But overall, there have been plenty of opportunities in the past 18 to 24 months; the S&P 500 Health Care Index is up 30 per cent in the past year. Looking ahead, there has been enthusiasm in the markets about a few high-profile drugs that will soon be available to consumers.

Follow on Twitter: @j2nelson

 

Top health care equity funds, one year to March 31, 2013

Fund Sym 1-yr
% rtn
(Mar. 31)
3-yr
% rtn
(Mar. 31)
CI Global Health Sciences Corp Cl 43.5% 18.7%
Mackenzie Universal Health Science Class 33.0% 11.2%
iShares S&P Global Healthcare (CAD-Hedged) ETF XHC-T 27.9%
TD Health Sciences 27.3% 18.2%
Renaissance Global Health Care 24.5% 12.0%
IA SRP Global Health Care (Renaissance) 23.7%
Altamira Health Sciences 21.8% 10.7%
BMO Equal Weight US Health Care C$ Hdgd Idx ETF ZUH-T 21.6%
Investors Global Health Care Cls-A 21.4% 8.4%
Fidelity Global Health Care-A 21.3% 9.0%

Source: Lipper

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