Page 11 - DIY Investor Magazine | Issue 39

When events, like pharmaceutical trials, occur, the outcome for a stock price can be stark either way.
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This proved pertinent when the trial read-out was interpreted as negative and prompted a fall in Uniqure’s share price of around
40%.
However, thanks to the inherent optimism of investors, often a
proportion of the upside will have been captured in the run up
While this kind of careful application of risk management means
Nov 2023 to an event, while the downside risk can be substantial. As a
fewer headline-grabbing overweights, it should offer a solution
result, Ailsa and Marek prefer to reduce the trust’s exposure to
to investors seeking an exposure to biotechnology without
a stock ahead of anticipated binary events in order to avoid the
heightened volatility. Indeed, over one, three and five years the potential for a significant derating.
trust has outperformed its biotechnology-focused investment
trust peers and can boast lower volatility than them consistently
This played out recently in the case of portfolio holding Uniqure.
through the period, as we discussed at length in our most
DIY Investor Magazine · The company has an approved treatment for Haemophilia B,
recent research.
which constitutes its primary business line, but was also in the
trial process on a treatment for Huntington’s Disease.
View the latest research note here >
With a read-out on the trials expected imminently, Ailsa and Marek reduced their position in the stock from being a top ten position down to around 0.1% of the overall portfolio.