How to Pick the Best European Biotech Funds

Although
during
2022
biotech
funds
suffered
more
than
the
market
as
a
whole,
in
recent
years
and
especially
in
recent
months,
in
the
heat
of
the
expected
interest
rate
cuts
by
central
banks,
the
category
has
recovered
quite
a
lot,
as
we
can
see
in
this
comparative
chart.

The
analysis
below
is
a
purely
quantitative
process.

The
idea
is
not
to
offer
a
buy
recommendation
but
to
help
investors
choose
their
funds
according
to
the
criteria
they
consider
most
important.

We
are
going
to
focus
on
funds
available
to
the
UK
investor
with
more
than
five
years
of
performance
history.

The
Best
Biotechnology
Sector
Equity
Funds

Based
on
these
criteria
there
are
sic
funds
that
meet
the
requirements.

I
will
compare
these
funds
in
terms
of
performance,
consistency,
risk,
volatility,
risk-return
and
costs
so
that
everyone
can
choose
their
best
candidate
according
to
the
criteria
they
consider
most
important.

The
data
has
been
calculated
as
of
June
30
2024.

1)
Which
are
the
best
funds
by
performance?

This
is
the
5-year
performance
ranking.

2)
Which
are
the
best
funds
by
consistency?

To
analyse
the
consistency
of
the
funds
I
have
divided
the
last
five
years
into
25
periods
of
36
months
and
ranked
the
six
funds
by
relative
performance:
the
best
performing
fund
in
a
given
period
will
receive
a
score
of
six
points,
the
second
five
points,
and
so
on.
But
I
will
give
more
weight
to
the
most
recent
data
than
to
the
oldest.
So
I
will
multiply
the
latest
ranking
data
by
25,
the
penultimate
by
24
and
so
on.
I
will
make
a
final
tally
by
adding
up
the
25
scores
(the
maximum
score
is
1,950)
and
I
will
produce
a
ranking
based
on
that
final
score.

3)
What
are
the
best
funds
by
volatility?

We
can
also
rank
the
funds
by
volatility
over
the
last
five
years.
The
ranking
has
been
established
by
giving
the
highest
ranking
to
the
fund
with
the
lowest
volatility.
Not
that
having
a
low
volatility
is
necessarily
an
advantage
for
the
fund,
but
this
ranking
allows
everyone
to
choose
the
fund
that
best
suits
their
risk
preference.

4)
What
are
the
best
funds
by
risk?

In
addition
to
volatility,
one
can
also
measure
risk
by
calculating
the
maximum
loss
suffered
by
the
fund
over
a
given
period
of
time.
This
is
the
five-year
maximum
loss
ranking.

5)
Which
are
the
best
funds
by
Return-Risk?

It
is
also
important
to
analyse
funds
not
only
in
terms
of
return
and
risk
separately,
but
also
in
terms
of
return-risk.
For
this
purpose
I
have
established
a
five-year
Sharpe
ratio
ranking.
The
higher
the
ratio,
the
better.

6)
Which
are
the
cheapest
funds?

Finally,
we
cannot
overlook
the
costs
of
the
fund.
Below
is
the
ranking
by
total
fund
cost.

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