Healthy yield attracts investors

The managers of International Biotechnology Trust (IBT) have focused its portfolio in oncology (cancer), diseases of the central nervous system and rare diseases – areas where pricing pressure on drugs and other therapies is less of an issue. This should cushion IBT as we approach election year in the US and (as is usually the case in the US political cycle) threats to intervene in drug pricing create volatility in the biotech sector. In an environment where concern has been building that economic growth is fading and we are approaching the end of this economic cycle, it might be worth remembering that this is not a sector which is particularly sensitive to this. Biotech companies find that demographics (the age profile and size of populations) and innovation combine to sustain demand and broaden their addressable market. Aided perhaps by its sector-leading dividend yield, the trust remains popular with investors and has been issuing shares to meet demand.