H&Q Healthcare Investors (ticker:HQH) appears to a be a decent value now within the closed-end fund universe. It is broadly diversified, and primarily invests in biotechnology, medical devices, pharmaceuticals and medical delivery. It also invests a limited portion of the portfolio in smaller, emerging companies and some restricted securities. In their last SEC filing (as of June 30), the top five holdings were: Teva, Gilead, Celgene, Amgen and Biogen.
On August 4, the fund discontinued their managed distribution policy. HQH had been paying out 2% of NAV in capital gains distributions every quarter for many years. The purpose of this policy was to narrow the discount to NAV, but the policy was not fully successful and mainly just reduced the NAV of the fund. On August 5, the day after the press release, the discount to NAV jumped up three percent from -17.78% to -20.73%.
On September 30, the fund announced a share repurchase plan to enhance shareholder value and narrow the discount to NAV. They will purchase up to 10% of the shares in the open market. This can occur during the one year period following October 9, 2009.
Here are some recent stats on HQH:
Ticker:HQH H&Q Healthcare Investors no regular dividend
- Total Net Assets= 343 MM
- Expense ratio= 1.51% Discount to NAV= -20.27%
- Portfolio Turnover rate= 65%
Disclosure: Long HQH