Biotechnology Fund
Bio Tech Fund was founded in 2001 by Gary E. Dell. The site is a virtual mutual stock fund consisting of equity positions in stocks primarily doing business in the the biotechnology sectors.There is little doubt that the biotech field is rich with possibilities in terms of investing. For those who are considering expanding their portfolio into a biotech fund, it is important to understand just how it works and what are the possibilities that may result.How Biotech Companies Operate?Most biotech companies consist of a small group of scientists or doctors that work together to develop a new drug. Sometimes the companies are large enough to be public traded and this is where the investing opportunities begin. Although it may seem that the small biotech companies are rather fragile if they do not develop a useful drug, the truth is that most of them do quite well thanks to their efforts in research and development.
Biotechnology Mutual Funds
Quaker Biotech Pharma-Healthcare Fund 800-220-8888
Fidelity Advisor Biotechnology Fund 877-208-0098
ProFunds Biotechnology UltraSector Fund 888-776-3637
Rydex Biotechnology Fund 800-820-0888
Saratoga Health & Biotechnology Fund 800-807-3863
Touchstone Healthcare & Biotechnology 800-543-0407
Biotechnology Stocks
Genentech (NYSE: DNA) OSI Pharmaceuticals (Nasdaq: OSIP)
ImClone’s (Nasdaq: IMCL) Gilead Sciences (Nasdaq: GILD)
QLT (Nasdaq: QLTI) Celltech (NYSE: CLL)
Atrix (Nasdaq: ATRX)
Biotech Funding
This is because in many cases their work catches the interest of large pharmaceutical companies who will often purchase the smaller biotech firm in an effort to fully develop and then release the drug they have created. In such cases, the investor who poured money into the small biotech firm stands to make a considerable profit when it is purchased by the larger company. In many cases, a profit of 50% or more is possible when the smaller company is bought out.
How to Invest? For those looking to invest, one of the best ways is through an exchange traded fund (ETF) which includes possibilities such as FBT, IBB, and XBI. There are different sectors in the biotech industry to invest, but each one of the ETFs will provide a substantial number of possibilities.
In addition, ETFs are a better choice for investment because you are not tied to a single company that may rise or fall, but instead several companies so that you diversify the risk. This is particular true when you are investing in sectors that are particularly volatile and subject to quick rises and falls in the market. By going with an ETF, you are taking advantage of potentially considerable gains, but also avoiding big calamities which are possible when you invest in a single company.
Observe the Risk? With all the benefits of investing in biotech funds, keep in mind that there will be risks even when you purchase ETFs. Biotech is a growing industry, but still a fragile one when it comes to individual companies. For every company that creates a real breakthrough drug there are a dozen or more others that fail to get off the ground.
Of course, the high risk is what offers the high reward. So, you will want to invest carefully by using ETFs which spread out the risk to several companies in the same general field. Keep in mind that even the best investments in biotech will still have a high failure rate in terms of the companies themselves.
The failure rate explains to a large degree why it cost so much to develop new drugs. However, the benefits to diversifying your portfolio are considerable when you spread the risk among numerous companies. So, keep in mind that it is a high risk field which should be well researched before you make any considerable investment.
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