BPIQ Updated Model Portfolios Continue to Outperform the Major Biotech ETFs
Our updated BPIQ model biopharma portfolios continue to perform well and beat the biopharma benchmarks
Based on extensive back-testing data, we identified the best BFHF-based strategies, and updated our strategies to implement BFHF data in 2023
Since we implemented these updated strategies, our BPIQ model portfolios are up over 35% and have beat XBI as we last reported in our portfolio update forum post of 9/24/24, and as continues to December 3, 2024 (See Figure 1 below), our BPIQ portfolios have outperformed XBI and IBB, the most popular bio/pharma ETFs, since we updated our strategies for these portfolios in April and September of 2023 to include more focus on top biopharma-focused hedge fund holdings, (FN^1).
Figure. 1. BPIQ MODEL PORTFOLIOS vs. XBI/IBB - Returns since 9/30/23 (the date we updated our strategies for most of our portfolios to take into account, top holdings of top biopharma-focused hedge funds)
It is noteworthy that in our back-testing using historical data, over a 3 year and longer time frame, strategies similar to our Top 10, Top 15, and Top 20 hedge fund favorites portfolios not only perform at least 100 other hedge-fund favorite strategies we tested, they outperform strategies similar to our top 50 hedge fund favorites strategy as well. However, there is at least 1 important difference between our back-tested Top 50 strategies and the rules we use for our BPIQ Top 50 portfolio (See FN^2).
It is further noteworthy that during the above period our BPIQ Run-Up portfolio yielded a 72.0% return. However, since we cannot back-test that portfolio strategy and because of difficulties in timing buy/sell for catalyst events, especially those without a set date, we do not have nearly the same level of confidence currently in our Run-Up portfolio strategy as we have in our quarterly HF favorites strategies. Thus, we did not include that data in Figure 1. We will continue to provide returns of our BPIQ Run-Up portfolio from time to time, so that we can better assess its performance and the potential of that catalyst run-up strategy.
To further demonstrate the impressive historical data back-testing performance of our Top hedge funding holdings strategies, we provide more exemplary data. Our top hedge fund strategies are selected strategies from at least 100 strategies we back-tested with historical data. These strategies not only beat historical returns of XBI and IBB, they beat the broader Russell 2000 (small caps FN^3) and S&P 500 indices over most time periods too (See Figure 2). It is noteworthy that in these timeframes, neither XBI nor IBB have beaten the Russell 2000. Of course, past performance is no guarantee of future performance (FN^1). However, it is noteworthy that our actual results since we started to implement these hedge-fund favorite strategies on April 1, 2023 for our first hedge-fund favorites portfolio, have yielded returns that are consistent with our back-testing, beating XBI by over 30%: 59.5% return for BPIQ Top 20 HF Favorite portfolio vs. 28.3% for XBI (4/1/23 to 12/3/24).
Figure 2. Back-testing results using the strategy currently employed by one of our portfolios vs. the Russell 2000 Index. Please note that this is back-testing data, not actual data (FN^1). See Figure 1 above for actual data for the BPIQ Hedge Fund portfolios.
In summary, Our current BPIQ portfolio strategies are based on hedge-fund favorite holdings, and selected from top performing strategies from back-testing over 50 hedge-fund favorite-based strategies using historical data. Our real-world portfolios using these strategies since 2013 continue to outperform the major biopharma ETFs (FN^1). We are excited to share future updates with you to determine whether these portfolios continue to outperform these ETFs.
Footnotes
^1
Investing in smid-cap biopharma stocks is risky. Past stock performance does not guarantee future performance. This post is not investment advice. Please do your own diligence and consult a financial professional before making any stock investment decisions.
^2
In our back-testing of top 50 HF holding strategies, we could not factor in our Top 50 portfolio rule by which we do not include tickers with products that are approved within the last few years that have a high Selling, General and Administration spend compared to their product revenue.
^3
Wikipedia: Russell 2000 Index (12/3/24): "The Russell 2000 Index is a small-cap U.S. stock market index that makes up the smallest 2,000 stocks in the Russell Index."
12/11/24 Article posted (EJV)
This article is not investment, legal or tax advice. Investing in smid-cap biopharma stocks is risky. Past stock performance does not guarantee future performance. This post is not investment advice. Please do your own diligence and consult a financial professional before making any stock investment decisions.