Biotech is booming, TD Health Sciences manager says

Science fiction "has essentially become a reality" for investors.

Diana Cawfield 3 May, 2018 | 5:00PM

Dr. Ziad Bakri, manager of the $819-million TD Health Sciences, likes to take small positions in up and coming biotechnology stocks. But only if he thinks there's a good bet there will eventually be a big payoff.

"What we don't want to do," says Bakri, a vice-president and portfolio manager at Baltimore-based T. Rowe Price, "is to have really small positions that don't have extreme outcome scenarios. To justify small positions, you have to say, well, it's small because it's risky, but the risk is worth taking because we can make many multiples (of the purchase price) over the years."

Biotech has made up about a third of the TD fund's portfolio for a number of years, with percentage weightings ranging from the high 20s to the mid-to-high 30s. Bakri, who is also a medical doctor, says he shares the view that there will be increasing progress in drug discoveries, health-care services and medical devices, among others.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Sage Therapeutics Inc26.75 USD-6.86
UnitedHealth Group Inc237.32 USD-4.84
Vertex Pharmaceuticals Inc225.48 USD-5.24

About Author

Diana Cawfield

Diana Cawfield  Diana Cawfield is an award-winning writer who has been a regular Morningstar contributor since 2000. Her numerous publication credits include the Toronto StarAdvisor's Edge and Chatelaine, as well as the Canadian Securities Institute's online educational services.