BioTech 10
Ten high-conviction biotech ideas with active risk management. Beats the XBI biotech ETF by roughly 6% per year over two decades. A sleeve play, not a standalone strategy.
BioTech 10 is a specialty portfolio: a sector-concentrated ideas portfolio, not a standalone strategy. Volatility is roughly 2.5x the broad market (42% annualized vs ~15% for the S&P), and the worst peak-to-trough drawdown was -71.3% during the 2021-2023 biotech bear market — softened from -76.8% by the active risk management overlay that closes broken positions before they wipe a sleeve. Do not run this as your only portfolio. Best uses: a small sleeve inside a diversified plan, or a research watchlist for individual biotech names worth deeper study. Sector strategies require longer time horizons and higher tolerance for drawdowns than core portfolios.
Sector benchmark: XBI (SPDR S&P Biotech ETF). Biotech as a whole goes through long out-of-favor periods that have nothing to do with stock selection. Comparing to a broad-market index can flatter or punish the strategy depending on what biotech is doing as a sector. XBI is the equal-weighted biotech ETF and the right comparison for whether this strategy is adding value within its own sector.
All figures are backtested → · benchmark: S&P 500 TR
Growth of $10,000
Data through August 21, 2026•Log scale
Performance
LiveAll three windows use the same data source as the chart. YTD spans the most recent rebalance; the rebalance window is one holdings composition only.
Two yardsticks, on purpose. Returns on this page are measured against the S&P 500 TR, the question of whether this model was worth owning instead of the broad market. Risk and skill reads are measured against XBI, its own sector, the question of whether the stock picking added value inside its pond. Beating the S&P justifies the allocation; beating XBI justifies the selection.
Year by Year Returns
Annual returns through August 21, 2026 · 2026 YTD live through August 24, 2026
Annual returns vs S&P 500 TR. Green is a positive year, red is a negative one. The taller bar won that year.
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Risk and reward
Both reads below are computed from the strategy's realized return history, not from a snapshot of today's holdings. The score only moves when the strategy's real behavior changes.
Over its full record this strategy has earned about the same risk adjusted return as the XBI. The last 12 months have run cooler than that record. Right of center means the strategy earned more return per unit of downside than the XBI over the window. The last 12 months marker is a rear view read of the strategy, not a forecast.
In its worst historical year BioTech 10 fell about -61%, and its deepest drawdown was -71.3%.
On the same scale: cash sits near 2, investment grade bonds near 18, a 60/40 mix near 45, and the S&P 500 near 72. Every portfolio we publish is a 100% equity, concentrated book, so each one is aggressive relative to a blended account. Size it to your own tolerance by blending in safer assets.
Rolling 3 year window. Above the dashed line: paid for the risk versus XBI. Below: not paid.
Rolling 3 year window on the same 0 to 100 scale. Risk breathes with market regimes; a snapshot score would hide that arc.
Why not just buy the biotech ETF?
Fair question. XBI is the SPDR S&P Biotech ETF, the standard way to own the sector, spreading its money across a hundred plus biotech stocks at roughly equal weights. BioTech 10 concentrates in ten conviction names instead. Owning the whole pond versus picking the fish. Here is the head to head since 2006, the first full year both existed.
Concentration cuts both ways and the drawdown row proves it: over this window BioTech 10's deepest fall was -70% against -57% for XBI. The extra return was paid for with deeper and longer losing stretches, which is why this model is sized as a sleeve, never as a whole account. When the sector itself is weak, ten names offer nowhere to hide.
Growth of $10,000, total return, 2006-02-28 through 2026-07-31, log scale. BioTech 10 is hypothetical backtested performance; XBI and S&P 500 figures are from public market data over the same window. Past performance does not guarantee future results.
Backtested Quarterly Returns
Backtested return for each quarter, measured on the locked record's month-end grid. Closed quarters run month end to month end, so they sit within about ten days of the rebalance dates rather than exactly on them. The row marked Live is the current quarter, measured daily from the last locked date forward. Different time period than YTD, which covers Jan 1 forward and spans quarters.
| Period | Dates | Days | Portfolio | S&P 500 TR | Alpha |
|---|---|---|---|---|---|
Current (from Q3 2026)Live | Aug 21, 2026 → Aug 24, 2026 | 3 | -1.0% | -0.3% | -0.7% |
Q2 2026 | May 31, 2026 → Aug 21, 2026 | 82 | +23.2% | +1.5% | +21.7% |
Q1 2026 | Feb 28, 2026 → May 31, 2026 | 92 | +14.0% | +10.5% | +3.5% |
Q4 2025 | Nov 30, 2025 → Feb 28, 2026 | 90 | +3.7% | +0.7% | +3.0% |
Key Characteristics
- •10 high-conviction biotech names, equal-weighted at 10% each
- •Roughly 3x the wealth of the XBI biotech ETF since Jan 2006
- •Roughly 6% per year alpha vs XBI across two decades
- •Twenty-plus year track record across biotech booms and busts
- •Quarterly rebalancing with active risk management discipline
- •Sector-concentrated by design: built for sleeve allocation, not standalone use
Rebalance Schedule
Rebalance Window OpenBioTech 10 rebalances four times a year, on the 20th to 25th of February, May, August, and November, for two reasons: the quarterly 13F window shows us where institutional money is moving, and buying on this schedule means every position is held through at least one full earnings season. We own businesses that prove themselves quarter after quarter, not trade around the proving. Pro members get the trade list by email the moment we publish.
BioTech 10 vs S&P 500
Sector weights as of 2026-05-04. Posture is one of several lenses we use to read a portfolio — never used in isolation.
Current Holdings
Weekly Model Report
Full sector breakdown
The trophy room. Yes, this is cherry-picked. That is the point. The full record, including the picks that did not work, is on the Track Record page.
BioTech 10 Hall of Fame
The 10 biggest closed-position wins from this portfolio. Total returns include dividends, verified against YCharts.
These are closed positions in the model portfolio, ranked by total return percentage (price + dividends). Hypothetical, backtested performance based on the methodology applied to historical data. Members who execute the same trades may not achieve the same results due to timing, fees, taxes, and individual circumstances. Past performance does not guarantee future results.