The woman who runs a $2.5 billion fund at Fidelity shares how she went from a Harvard lab to picking out the most promising high-risk, high-reward biotech stocks

notoriously riskyMost biotechs are researching treatments, and don't have any medicines available for sale yet, so investors are betting more on the company's vision and science and the team behind it than anything more concrete.

The biotech fund invests in companies of every size, from riskier small-cap biotechs to more established large-cap ones, with an eye to whether they're valued reasonably relative to their financial potential.two out of five stars by Morningstar as of the end of March, a ranking that's based on past performance.

The fund is roughly broken up into three"buckets," with the biggest positions for the most well-established companies, she told Business Insider.

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