Pick #1: THQ (SEEKING ALPHA)
Tekla Healthcare Opportunities Fund (THQ) - Yield 5.8%
If you are looking for growth at bargain prices, there is no better place to invest other than the healthcare sector. Despite having very strong tailwinds, this is one of the cheapest sectors that the markets offer today. We can be very thankful that we live in a time where medical care is advancing, making illnesses and injuries that were once a death sentence, survivable. Heart surgery, knee and hip replacements, cancer treatments, and more have advanced at an incredible rate over the past 40 years. The costs have advanced right along with it.
THQ is diversified within the healthcare sector with 37% of the fund invested in pharma and biotech companies, 19% in medical equipment, and 19% of the fund invested in healthcare providers and services companies.
As a sector, healthcare has very strong fundamentals with an aging U.S. population increasing demand for medical services and equipment across the board. The healthcare sector is only going to get hotter from here. THQ is a great way to take advantage of it and is currently trading at a 2.6% discount to NAV. THQ uses leverage to improve returns, they are currently leveraged at 20% of gross assets.
THQ is an actively managed fund with Tekla being one of the best managers in the field. This means that not only do you get an actively managed portfolio, but you also get access to "private investments" that are not listed or, in other terms, you would not be able to access as a retail investor.
As an added advantage, healthcare is one sector that is inflation resilient because it can pass the rising costs directly to the consumers. So it is a good sector to hold for the next few years as inflation (and inflation expectations) pick up.
Successful Trading is the art of minimizing long term risk and maximizing capital allocation.
