November 16, 2018

Healthcare/Biotechnology Sector Funds Post Near-Historic Net Inflows

by Patrick Keon.

Healthcare/biotechnology sector funds (including both mutual funds and ETFs) took in $1.8 billion of net new money for Lipper’s fund-flows week ended Wednesday, November 14, 2018. It was the group’s second largest weekly net inflows ever (Lipper began tracking fund-flows data in 1992) and its largest since the fund-flows week ended November 16, 2016, when it had net inflows of $2.7 billion. It was also the largest net inflows among the equity peer groups for this past week. The healthcare peer group has been on a good run of late; it is on pace for seven straight months of positive net flows (the inflows for November to date are +$1.4 billion) during which time the group has grown its coffers by $10.4 billion. This streak has pushed healthcare funds’ year-to-date net-positive flows to $6.6 billion, which could be their fourth best annual result ever. Prior to this streak the group had suffered seven consecutive monthly net outflows, which saw $7.6 billion of assets leave.

Over the last seven months the net inflows for the healthcare/biotechnology peer group have been relatively diluted, with the ten highest net inflows at the individual fund level accounting for $8.2 billion. The largest positive net flows over this period belonged to Healthcare Select SPDR ETF (XLV, +$1.6 billion), First Trust NYSE Arca Biotechnology Index Fund (FBT, +$1.4 billion), and Fidelity Select Medical Technology and Devices Portfolio (+$1.1 billion). For the past week ETFs accounted for the lion’s share of the net inflows (+$1.7 billion). Flows were heavily concentrated during the week, with only two ETF products accounting for over 89% of the total positive net flows for the group; once again Healthcare Select SPDR ETF (XLV, +$776 million) recorded the best net inflows.

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