Marek Poszepczynski, co-manager of International Biotechnology Trust (IBT) at Schroders, points out the inverse correlation between Treasury yields and biotechnology stocks.
When US government bond prices fall and their yields point to higher future interest rates, biotech stocks tend to do badly, as was the case for about two years from November 2021.
But when Treasury price rise and their yields fall, as has happened since October, the sector rallies.
This is the first excerpt from our recent event with International Biotechnology. If this whets your appetite, you can watch a one-hour recording of the whole thing.
Can’t watch now? Read the transcript
Marek Poszepczynski:
I want to point out the interest rate movements on the XBI, which is the small-cap index of biotech. The light green shows you that the interest rates, as soon as they go up, the biotech industry or the small caps, are affected. One of the reasons is that…
