Top Picks 2020: Tekla Life Sciences Fund (HQL)

01/23/2020 5:00 am EST

Focus: HEALTHCARE

Nate Pile

Editor, Nate’s Notes and The Wagmore Advisory Letter

Tekla Life Sciences Fund (HQL) frequently makes the cut as my Top Pick for more conservative investors — thanks to its generous distribution policy, explains Nate Pile, editor of Nate's Notes.

Meanwhile, the fact that the biotech sector happens to be on fire at the moment makes it that much easier to recommend this closed-end fund for investors as 2020 gets underway!

As its name suggests, the Tekla Life Sciences fund is invested in a wide range of both public and private companies doing work in the life sciences (i.e. biotech) space.

I believe it represents a great way for investors who want to be involved in the sector but don't like the idea of owning individual biotech stocks (which can be quite volatile!) to participate in the growth of the industry with a single purchase (and without losing much sleep at night!).

As hinted at above, along with providing some nice exposure to the biotech sector, the fund also has a distribution policy that calls for it to distribute 2% of its net assets each quarter. 

This distribution is usually paid in new shares (which I encourage my subscribers to take), but those investors who would rather have cash can request that they be paid in cash rather than shares (you just have to set it up with your brokerage firm). HQL is a strong buy under $15 and a buy under $18.

(Editor's note: Nate Pile's Top Pick for 2019, Catasys (CATS), has risen 71%. The company has developed a proprietary data analysis platform to help individuals in healthcare plans better manage chronic conditions. He The advisor says, "This is a rapidly growing field. I believe there is still plenty of upside ahead.)

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