FUND FOCUS: £2.3bn trust Worldwide Healthcare in rude health
FUND FOCUS: Global health care booming as £2.3bn trust seeks top biotechs
Investment fund Worldwide Healthcare published its annual figures four days ago.
A share price decline of nearly five percent for the year to the end of March was partially offset by a healthy 17 percent annual dividend increase.
While the trust chairman admitted that the stock market was “challenging in the near term” due to higher interest rates and nagging inflation, he expressed confidence in the fund’s investment mission — seeking long-term returns from the best healthcare companies.
The £2.3bn listed fund is one of a handful of trusts specializing in making money from global healthcare companies.
This is an investment theme that includes the world’s largest pharmaceutical giants, such as AstraZeneca and Pfizer, as well as companies involved in leading medical technology, such as robotic surgery and the use of electrical pulses to treat people with irregular heartbeats (atrial fibrillation). .
Confidence: Worldwide Healthcare’s share price fell nearly 5%, but this was partially offset by a healthy 17% increase in its annual dividend
While Worldwide Healthcare’s investment record over the past five years isn’t quite as strong as that of competing trusts such as Polar Capital Global Healthcare and Bellevue Healthcare, it has achieved returns of 31 percent over this period.
What is more interesting to potential investors is that the trust’s trustees share the board’s confidence in the future.
They believe a combination of new drugs, exciting new medical procedures and industry acquisitions will help drive attractive returns.
Worldwide Healthcare is managed by OrbiMed, a New York-based investment house specializing in healthcare. In addition to Worldwide Healthcare, the trust runs Biotech Growth, also listed on the London Stock Exchange.
Sven Borho, one of the founders of OrbiMed, is joint manager with Trevor Polischuk. He says: ‘From the trust’s inception in 1995, the focus has been on identifying the best healthcare investments around the world – the absolute best, anywhere. This has proven to be the best approach and we will not deviate from it.’
Currently, the portfolio includes 61 stocks, most of which are listed in the United States or Europe. There are well-known names among the top holding companies, such as France-based Sanofi, Novo Nordisk (Denmark) and Swiss pharmaceutical giant Roche. Borho says some of these big drug companies could see their revenues increase if new drug sales are as strong as expected.
For example, a few days ago, the British government announced the launch of a pilot project to try out wider access to weight-loss drug Wegovy, produced by Novo Nordisk. Borho says sale of Wegovy; Sanofi’s Treatment for Eczema (Dupixent); and AstraZeneca’s cancer drug Enhertu could generate sales of more than £8 billion.
Still, Borho is also keen to invest in younger companies, mainly focused on biotechnology, whose valuation could rise sharply if sales of newly developed treatments take off — or if they are acquired by a larger rival.
Recent purchases by the trust include a stake in US-based Apellis Pharmaceuticals, a company that designs drugs that target the proteins that lead to blindness.
“The pharmaceutical giants are never as good as smaller companies when it comes to developing new medicines,” says Borho.
“Therefore, acquisitions of some of these innovators are inevitable. It’s a theme that we think will continue throughout the year and that we hope will generate a return on investment.”
Worldwide Healthcare pays dividends twice a year. In the last financial year they totaled 31 pence and compared to a share price of £32.
The exchange ID code is 0338530 and the ticker is WWH. The annual fund costs total 0.89 percent.
jeff.prestridge@mailonsunday.co.uk
