DIY Investor Magazine | Issue 29
Page 39 - DIY Investor Magazine | Issue 29
P. 39
drugs to those of other major countries, allow drug imports from such countries and instruct the government to negotiate lower drug prices for those on Medicare.
The managers acknowledge the impact that this is having on share prices but seem fairly sanguine. They are underweight most of these stocks anyway, relative to the trust’s benchmark, as they see more exciting opportunities elsewhere.
It isn’t all about the US either. For example, Worldwide Healthcare has sizeable exposure to emerging markets, notably China, as innovation in that part of the world is creating new investment opportunities.
The managers expect to see more takeovers and mergers within the sector. There have been a few high-profile deals recently as cash rich large companies snap up smaller players with promising new products.
MORE THAN JUST DRUGS
It isn’t all about drugs either. Within the medical device market, the managers see potential for a recovery in demand as we work through the collective backlog of surgical procedures.
Assuaging this pent- up demand should benefit the managed care providers too. They also see growth in areas like robotic surgery, health monitoring devices and new diagnostic tools.
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The more biotech focused funds have achieved mixed returns recently – all driven by the excitement around individual stocks within their portfolios.
International Biotechnology is the laggard of the group – the only fund in this sector to have posted an NAV decline over the past 12 months.
By contrast, RTW Venture and the minnow of the sector, Adams, have done exceptionally well.
Worldwide Healthcare is more broadly based than these and its closest competitors in the trust market are BB Healthcare and Polar Capital Global Healthcare.
The latter fund has just beaten Worldwide Healthcare over the past 12 months but lags it over longer time periods.
The real winner though is BB Healthcare which outstrips both funds by some margin.
BB Healthcare’s annual report was published at the beginning of March. While this is a little out of date, its manager writes even more extensively than Worldwide Healthcare’s on the sector.
This is worth a read if you are interested in these funds – you
can find it in our Economic roundup from April (SEE PAGES
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39 DIY Investor Magazine | Jun 2021