HOW TO PLAY IT
investing in biotech stocks is not for the faint of heart. Companies that report bad clinical-trial results can lose half their value in a day. There are two biotech index funds that will give you plenty of diversification at little cost: the SPDR s&p biotech ETF and the ishares nasdaq biotechnology ETF. but since index funds invest in biotechs without regard for their clinical-trial data, i don’t recommend them. it takes expertise and a lot of time to stay on top of clinical developments. That’s why a biotech manager with a great track record, like Joseph edelman, adds a lot of value. among the biggest biotech mutual funds, fidelity select Biotechnology, with a ten-year average return of 18.5% under the stewardship of manager rajiv Kaul, is the best bet.