Orion Portfolio Solutions Biotechnology Strategy Update

We officially launched the Orion Portfolio Solutions Biotech Strategy on June 1st. As a reminder, the strategy is focused on investing in biotech companies that are developing treatments for COVID-19. All 32 securities in the portfolio are equal-weighted to diversify our exposure to this emerging set of technologies. The companies in the portfolio range from large cap companies with numerous drugs on the market, to small scrappy startups that are still in the process of developing their first marketable product. Nearly half of the companies in the portfolio have a market cap under one billion dollars, with the potential for significant growth.

As we approach the end of Phase 3 clinical trials for several COVID-19 treatments, it is important to consider the future direction of the strategy. COVID-19 may not be with us as long as many of us worried it would be. Biotechnology, however, will continue being necessary for continued improvements in human health. All companies held in the portfolio are developing treatments for diseases other than COVID-19 and are at the cutting edge of new technologies, such as monoclonal antibodies, a technology that may deliver an effective COVID-19 treatment before any vaccine is approved. The portfolio is already in a good position to benefit from these other efforts, and our investment team is closely following developments in this fast-paced market.

Lastly, I would like to reiterate that the biotech industry has a generally low correlation to the performance of the broader market. Further, biotech stock performance is contingent primarily on the outcomes of research and development efforts, rather than the state of the economy. These two characteristics could make biotech a great addition to a well-diversified equity portfolio.

The biotech strategy is currently available through the Orion Portfolio Solutions advisor portal.  Click here to download the strategy fact sheet

And if you missed our webinar last month, check out the replay and learn more about the investment strategy and how an allocation to the biotech industry can potentially add alpha to clients’ portfolios.

Why Now is The Time To Consider Biotech Exposure – Advisor Webinar

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The CFA® is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org.


About Horacio Carias, CFA
Horacio Carias is a Senior Quantitative Portfolio Manager at Orion Portfolio Solutions and published Biomedical researcher. Previously he served as a primary PM for more than $20B AUM at Dimensional Fund Advisors.