What to Buy: H&Q Life Sciences Investors (NYSE: HQL)

Why to Buy Now: HQL is a closed-end fund (CEF) that specializes in the biotechnology sector. As such, it offers investors the potential for long-term growth with a substantial income kicker via its 7.1 percent distribution rate.

While the fund invests primarily in equities, it also has a venture capital sleeve where it can invest in development-stage companies that have yet to go public. That definitely differentiates it from the average healthcare fund.

Fortunately, management knows how to navigate this risky space. The lead manager boasts both impressive academic credentials along with extensive industry expertise. And he’s been at the helm for well over a decade. Other members of the management team have similar backgrounds and longevity with the fund.

This rare combination of experience and financial acumen has translated into an impressive performance in recent years, with the portfolio gaining 32.6 percent over the past three years.

Despite the fund’s success, we’ll be able to buy our shares at a nearly 4 percent discount to net asset value. Buy HQL below 19.77.