Top stocks to invest in – Health Care Investing: The Promise and the Pitfalls

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For Andy Acker, CFA, portfolio manager of the Janus Global Life Sciences Fund, these are especially exciting times for investors in the health care sector. Opportunities abound, as significant advances in understanding the genetic causes of disease have resulted in a surge in new and more effective treatments.

At the same time, risks remain and a disciplined approach to stock selection and portfolio construction is imperative for success. A seasoned investor — he’s been with Janus for nearly two decades — Acker recently spoke to delegates at the CFA Institute Conference: Equity Research and Valuation 2016 in New York about the promise and pitfalls of investing in health care stocks.

Acker offered a candid review of some of his most successful investments as well as some of the battle scars he’s endured over the past decade, experiences that have helped to shape his current investing approach. And while he is optimistic that therapeutic breakthroughs will continue apace, he also warned that health care stocks typically produced the biggest disparity between winners and losers of any sector of the stock market. According to Acker, however, it is the often binary nature of health care investing — a drug under development either works or it doesn’t — that offers opportunities for talented active managers to generate alpha.

All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

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