I view research like Pre fishing for a tourney, the more effort I put in pre fishing the better the tourney, same goes here. So kinda interested in how everyone would research this fund. I choose medical fund because I feel that segment (Funds and individual stocks) are going to continue to outperform market. Anyway, take a look at the following and break down what you see.
I'll give my thoughts to get us started.
I like the management, been in place since 2007 and looks like no changes in next 3 years,
I like the growth curve/earnings curve, good steady climb, no spikes in either direction. Because of this I look at the Vs Alpha instead of the Vs Beta (if the fund or stock had sharp increases or decreases I would look more at how it performs vs Beta).
I like the top 10 holdings and that they represent 25% or overall portfolio. And I like that less than 25% are international holdings. I feel in the medical arena because it is overseen by the FDA and other government agency's to much international holdings is not good exposure.
For me, the most important thing when looking at a fund are the holdings. Past performance is almost irrelevant to me. Most of the time past perf is used as a selling point and obviously there is no way to know how it will perform in the future. The medical field, I feel, is one of the best places to invest. People will always need their medicine.
About this particular fund. If you have had it, I would continue to hold onto it and maybe cut some of it. But I probably would not start a position in it today or add more money to it. It's sitting at all time highs. Many of the top holdings have performed very well over the last several years. And there are some very high P/E multiples. I would want to know what firms are holding how much stock of these individual names. There are activists involved in atleast one of the stocks. VRX. That may play a role in how long I would hold. These stocks, biotechs, are usually pricing in good, future data and pricing on drugs. It just takes a little bad news, like a law change with generic drugs, to cause a dramatic affect. A failed drug trial or an FDA ruling will also play a role.
I do like the risk associated with this fund and think this is a good alternative to buying individual names, for the avg investor. But would need to know the other holdings because the multiples of some of these stocks are a little rich for me.
Also, I might look into the IBB, nasdaq biotech.
I'd look at the manager(s), how long he's been there, how he compares to other managers. I'd also look at the funds performance vs other funds of the same type.
Overall asset size is important, most funds cannot contain more than x percent of an individual stock. Large asset sized funds may not be able to purchase as many shares of a stock that they like as they would want to.
How much cash is the fund holding?
Compare annual fees.
Don't overthink it, get a good fund that compares well to other funds in the same sector, has a good manager, and has low expenses.
I day trade and go just for quick $$. I watch for stocks that have some ups and downs weekly usually at least more then $1.00 consistently. I trade on Fidelity site and follow the Quartely reports for the stock. If the stock has a good up and down and the Qtr. report is due then i consider buying a couple of days before the report if it's down and then watch it closely over the next day or so. I am not greedy when selling and will take an early profit instead of taking a chance on the price going down. Since i have only been doing this for 2 1/2 yrs i am still trying to get an understanding of how i can protect my profits, I am starting on setting trailing stops to help boost profits. I don't buy no less then 500 shares and usually 1000 that way every $1 adds up quickly. I am a real rookie on this but so far i am about 55k to the good.
I've been researching my Fidelity portfolio on Fidelity Insight and other such periodicals for the past 20+ years. It's done me very well to follow their learned advice over the years.
Now, I'm putting tax paid money into ETF's, which are essentially index funds of index funds. The service charges are 5-6 times cheaper than that on 401k's and IRA's placed into mutual funds.
We're now retired and withdrawing a little $ as we now have no Earned Income.
I would hate to be 25 years old and having to build a retirement account with the stock market at an all time high and interest rates at a net zero.
Google finance is a great tool for just looking at history/activity on funds and stocks.
The holdings for me are also the first thing I look at and then the fees. If you have individual stocks and/or other funds its important to make sure you are not duplicating too much on something else you have.Originally Posted by boneil
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