Funds & ETFs 834

Healthcare is our primary focus here, but we also present a blue chip fund for you this month.

SPDR S&P Biotech ETF (XBI) | Daily Alert September 18
SPDR S&P Biotech ETF seeks to mirror the S&P 500 Biotechnology Select Industry Index. The index and ETF provide industry exposure across large-, mid-, and small cap stocks, with primary exposure in the mid- and small cap range. The ETF will hold roughly 130 companies and takes a modified equal weight approach, meaning you will not see the top 10 holdings representing a majority percentage of total net assets. At the end of the second quarter, the Top 10 were 14.3% of total net assets.

XBI has easily outperformed the S&P 500 year-to-date (as of July 31, 2020) and over the past trailing year. When evaluating this fund, though, one has to keep in mind the volatility of the biotech industry. It is driven by the success or failure of the research and development. This trait is important because it leads to specific companies being capable of turning in some very big gains over a short period of time or, conversely, some very big losses.
Brian W. Kelly, Moneyletter, moneyletter.com, 800-890-9670, September 2020

Blackrock Health Sciences Trust (BME) | Daily Alert September 25
The objective of Blackrock Health Sciences Trust is to provide total return through a combination of current income, capital gains, and long-term capital appreciation.

BME has top rated management (Dr. Erin Xie, Managing Director, and her team, averaging over 20 years’ experience in healthcare investing). This team, we understand, is one of the very best.

We have followed the trust since our original purchase at $25 per share in April of 2005 (now close to $41). Our yield to cost is over 9%. The older U.S. population (65 and older) means more is being spent on healthcare. The current 13

pandemic requires us, as we see it, to invest in the industry. This is where experienced analysts come into play and Dr. Xie is considered to be one of the very best. BME is our selection to cover the ever important health sciences industry for our portfolio.
Sean Christian, The Personal Capitalist, 9524 East 81st Street, Suite B #1715, Tulsa, OK 74133, September 15, 2020

*Fidelity Blue Chip Growth Fund (FBGRX)
With total assets of $41 billion, Blue Chip Growth needs room to grow. As of December 1, 2020, its investment strategy will be slightly expanded to allow for more stocks outside the orbits of the large-cap S&P 500 and Dow Industrials indexes. This wider universe holds the potential for Manager Sonu Kalra (who also runs OTC) to increase Blue Chip’s exposure beyond its approximate 7% and 2% weights in mid- and small-cap stocks, respectively. In fact, the lower threshold could mean more stocks with market caps of “only” $1 billion.

The new prospectus language may also result in Blue Chip Growth (which is up 39.1% this year) increasing its share of foreign stocks. At present, only 8% of its assets are overseas, including 3% in the emerging markets.
Jack Bowers, John M. Boyd and John Bonnanzio, Fidelity Monitor & Insight, fidelitymonitor.com, 800-397-3094, October 2020

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