Investment trust insider compares Biotech Growth and International Biotechnology – James Carthew: Am I too late to switch biotech trust?
Our columnist is disappointed by Biotech Growth Trust’s returns over the past decade and wonders whether rival International Biotechnology is now more compelling.
Biotech Growth Trust (BIOG) has been on a rollercoaster ride over the past few years.
The share price peaked at over £17 in February 2021 when shareholders were excited by the money pouring into the sector in the fight against Covid, before plunging to less than £8 in May 2022 as investors fretted about the impact of rising interest rates on unprofitable companies. The shares rallied briefly but then hit a new low in October 2023 of £7.24. They climbed back above £10 by March 2024 then stalled, before falling back again to about £8.20 today.
The net result of this is that shareholders have made almost no return over the past 10 years, but buybacks mean that the market capitalisation of the trust has more than halved to about £234m.
I have been a shareholder for most of that period. Fortunately, I bought my initial stake in June 2016 at £5.82 and top-sliced in September 2020 at £13.50. Nevertheless, it has been a frustrating investment.
Relative to the Nasdaq Biotechnology index, the trust’s underlying portfolio net asset value (NAV) has underperformed in seven of the last 10 calendar years. Over the 10-year period ended 31 January 2025, BIOG returned 29.8% in NAV terms, compared with its benchmark’s 73%, and 104.3% from its nearest rival, International Biotechnology Trust (IBT).
Clearly, something is not working… read more here