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On the week of the biggest annual meeting for biotech investors, biotech funds saw their steepest outflows since late July.

In his regular note tracking a sample of healthcare/biotech-dedicated funds, Piper Sandler analyst Christopher J. Raymond wrote that in the seven days ending at the close of business on January 15, roughly $787 million left the funds. Thats a 0.95% drop and the largest number since the last week in July, when $872 million left the funds.

The week includes most of the J.P. Morgan Healthcare Conference, which drew thousands of biotech, pharmaceutical, and other health-care executives and investors to San Francisco for days of meetings. The SPDR S&P Biotech ETF (ticker: XBI) fell 2% on the first day of the conference, January 13, on disappointment over the absence of any major acquisitions. But the index rose as the conference progressed, up 2.9% on January 14 and 0.7% on January 15.

The weeks outflows followed a strong week, which saw inflows of $891 million.

The sample of funds that Raymond tracks includes 121 funds with roughly $84 billion in assets, and is reported by Lipper/AMG Data Services.

This is a key dynamic to monitor as periods of net inflows historically correspond with biotech outperformance while periods of net outflows correspond with sector underperformance, Raymond wrote.

The XBI is up 2.1% so far this year, while the iShares NASDAQ Biotechnology ETF (IBB) is up 1.5%.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

Excerpt from:

Investors Fled Biotech Funds This Week During the Biggest Health-Care Conference of the Year - Barron's