- Biotech Growth Trust has underperformed this year but has a good long-term performance record
- Its discount to NAV has recently widened
- It offers exposure to smaller and Chinese biotech companies
Biotechnology is an area from which some of the world's most exciting innovations emerge. But as seasoned healthcare investors know, it’s a sector that can deliver heavy losses as well as huge gains. Biotech Growth Trust (BIOG) has certainly had its share of volatility recently, with its share price rising 68 per cent last year but down 24 per cent between the start of this year and 21 September.
Volatility aside, Biotech Growth Trust has delivered strong long-term performance. Despite the recent setback, it made a net asset value (NAV) total return of 70 per cent over the five years to 21 September, ahead of Nasdaq Biotechnology index's 62 per cent. It was also trading at a discount to NAV of 8.3 per cent, which compares with a 12-month average of 0.7 per cent. This could prove an attractive entry point for long-term investors with a high risk tolerance.