Bellevue Digital Health

The easing of tensions in the Iran conflict led to a recovery in equity markets in April, with the broad equity market closing up +9.6%. The healthcare sector (-0.2%) and the medtech sector (-3.5%) did not benefit from the lower oil prices and easing inflation concerns associated with the agreed ceasefire. As a result, the medtech sector is currently trading at historically low absolute and relative valuation levels. The Bellevue Digital Health Fund (-0.5%) significantly outperformed the medtech sector and performed in line with the broader healthcare sector.

During the month under review, 19 of 36 portfolio holdings contributed positively to performance: Glaukos (+33.4%), Privia (+20.8%), Omada (+16.0%), Globus (+4.7%), 10x Genomics (+3.9%), and Align (+2.7%). The IPO of Alamar Biosciences (+47.3%) performed particularly well. Alamar is a diagnostics company whose highly precise protein analysis (proteomics) provides the technological foundation for drug research and advanced disease diagnostics.

Glaukos performed exceptionally well, reporting strong Q1 2026 results that exceeded expectations and led to an upward revision of full-year guidance after the first quarter. In particular, the iDose ocular implant for lowering intraocular pressure exceeded expectations following somewhat unclear demand dynamics in H2 2025, while reimbursement expansion for Epioxa, a new treatment for corneal thinning, is progressing well. The company has a strong product pipeline for 2026, making the revised guidance still appear conservative and pointing to further strong quarterly results over the course of the year. Healthcare services providers Privia and Omada benefited from easing conditions in the US insurance market, while strong app download trends indicate a robust Q1 2026 for Omada. 10x Genomics introduced its new flagship analysis system, Atera, designed for large-scale whole-transcriptome studies, offering high throughput and lower costs without compromising quality.

Performance was negatively impacted primarily by Insulet (-18.0%), Waystar (-11.3%), Veeva (-11.2%), Abbott (-11.0%), and EssilorLuxottica (-7.2%). Following the voluntary recall of certain Omnipod 5 shipments in March, Insulet added further batches to the recall. While this initially unsettled investors, the impact on full-year results is limited and the company did not adjust its guidance. Waystar met analyst expectations in Q1 2026, but results fell short of investor expectations. In the short term, the ongoing shift toward digital patient payments is expected to weigh on Waystar’s growth, although margins remain unaffected. Veeva also came under pressure due to ongoing AI-related concerns and weaker expected momentum in cloud software order intake for R&D in the biopharma industry; however, new clinical cloud applications provide reasons for confidence.

All performance data in USD / B shares.

Our discussions with numerous management teams leave us confident about the 2026 financial year. Current equity market volatility is overshadowing the strong operational momentum in the digital health sector. From a fundamental perspective, digital health companies remain on a solid path toward above-average growth, which we expect to continue throughout the year. The positive sector dynamics and renewed investor interest in healthcare make us highly confident about equity market prospects in 2026. Inflows into the broader healthcare sector should also benefit digital health.

The approval and launch of relevant new products are expected to continue driving strong revenue growth. In addition to innovation as the key value driver, factors such as attractive valuation levels and the anticipated acceleration of M&A activity and IPOs support an investment in the Bellevue Digital Health Fund.