BB Adamant Emerging Markets Healthcare (Lux)

 Increased demand for healthcare products/ DL due to rising share of the middle class      

Above-average increase in healthcare spending in the Emerging Markets

 Complementary building block for a diversified Emerging Markets portfolio 

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Investment Focus

ISIN-No. LU1585228379

This fund invests in the entire emerging-market healthcare universe. Its investment universe consists of generics producers, pharma and biotech companies, medical technology and services firms. Experienced sector specialists focus on profitable companies that have a well-established product portfolio. Investments are made based on fundamental research analysis.

Indexed performance (as at: 24.09.2021)

NAV: USD 224.31 (23.09.2021)


Fonds (Brutto)
01 Jan 2010 - 01 Jan 2010
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Rolling performance (23.09.2021)

I2-USDBenchmark
23.09.2020 - 23.09.20215.24%12.98%
23.09.2019 - 23.09.202050.44%44.42%
23.09.2018 - 23.09.2019-7.65%-22.70%
23.09.2017 - 23.09.201813.91%8.30%

Annualized performance (23.09.2021)

I2-USDBenchmark
1 year5.24%12.98%
3 years13.46%8.02%
5 yearsn.a.n.a.
Since Inception p.a.14.50%9.84%

Cumulative performance (23.09.2021)

I2-USDBenchmark
1M3.55%2.70%
YTD-3.82%-3.62%
1 year5.24%12.98%
3 years46.21%26.12%
5 yearsn.a.n.a.
Since Inception79.45%49.95%

Annual performance

I2-USDBenchmark
202051.13%52.82%
201917.49%3.67%
2018-12.93%-20.89%

Investment Focus

This fund invests in the entire emerging-market healthcare universe. Its investment universe consists of generics producers, pharma and biotech companies, medical technology and services firms. Experienced sector specialists focus on profitable companies that have a well-established product portfolio. Investments are made based on fundamental research analysis. Stock selection is exclusively bottom-up, independent of benchmark weightings.Show moreShow less

Investment suitability & Risk

Low risk

High risk

The Fund’s objective is to generate an attractive return over a long-term horizon. It is therefore particularly suited to investors with an investment horizon of at least 5 years who want to diversify their portfolio with selective exposure to the healthcare sector in emerging markets and who are willing to accept the risks typically associated with stocks in this sector.

General Information

Investment ManagerBellevue Asset Management AG
CustodianRBC Investor Services, Luxembourg
Fund AdministratorRBC Investor Services, Luxembourg
AuditorPriceWaterhouseCoopers
Launch date31.05.2017
Year end closing30. Jun
NAV CalculationDaily "Forward Pricing"
Cut of time09:00 CET
Management Fee0.90%
Subscription Fee (max.)5.00%
ISIN numberLU1585228379
Valor number36153231
BloombergBBAEI2U LX
WKNA2DPAT
Total expense ratio (TER)2.26% (31.08.2021)

Legal Information

Legal formSICAV Luxembourg jurisdiction
SFDR categoryArticle 8
Redemption periodDaily

Key data (31.08.2021, base currency USD)

Beta0.78
Volatility19.50
Tracking error9.81
Active share53.91
Correlation0.90
Share ratio0.63
Information ratio0.27
Jensen's alpha5.04
No. of positions42

Top 10 positions

Wuxi Biologics
Innovent Biologics
Richter Gedeon
Wuxi Apptec
Celltrion
Rede D'Or
Samsung Biologics
Sun Pharmaceutical
Beigene
Cipla
4.8%
4.8%
4.6%
4.3%
3.7%
3.7%
3.5%
3.5%
3.4%
3.4%

Market capitalization

2 - 5 bn
5 - 15 bn
15 - 20 bn
> 20 bn
Others
8.2%
40.9%
9.4%
38.3%
3.2%

Geographic breakdown

China
India
South Korea
Brazil
Hungary
South Africa
Jordan
Others
Cash
51.8%
14.9%
9.3%
8.0%
4.6%
3.3%
2.5%
2.8%
2.8%

Breakdown by sector

Services
Generics
Biotechnology
Medtech
Others
Cash
34.9%
31.9%
19.5%
6.8%
4.1%
2.8%

Currency

HKD
INR
CNY
KRW
USD
BRL
HUF
ZAR
GBP
31.6%
14.9%
14.9%
10.9%
9.3%
8.0%
4.6%
3.3%
2.5%

Opportunities

  • Access to defensive growth – emerging countries are facing aging populations and changing lifestyles.
  • Development of healthcare infrastructure combined with a growing middle class is an additional growth driver.
  • High growth potential of emerging markets.
  • Attractive valuations compared with the projected medium to long-term growth.
  • BB Adamant Team – top-performing pioneer in the management of healthcare portfolios in emerging markets.

Risks

  • Equities are subject to price fluctuations and so are also exposed to the risk of price losses.
  • Investing in emerging markets entails the additional risk of political and social instability.
  • Investments in foreign currencies are subject to currency risks.
  • There is a higher counterparty risk due to regulatory changes, volume caps or operational restrictions when investing in Chinese A-equities
  • The fund may invest in financial instruments that might have a rather low level of liquidity, which can in turn affect the fund’s liquidity.

TINA (there is no alternative to equities) is still the driving force on stock markets. Global equity markets as tracked by the MSCI World Index advanced another 2.5% in USD. In addition to expansionary central bank policies, markets were buoyed by the very pleasing quarterly results. Uncertainty triggered by further regulatory action from the central Chinese government clouded the overall positive sentiment only briefly. Emerging markets therefore also ended the month in positive territory, with a gain of 2.6%. Fears that future intervention by China's Communist Party could target the healthcare sector led to some selling pressure. Consequently, these stocks retreated 0.8% over the month and were about 2.7% lower at the end of August than at the beginning of the year.

Investor worries related to political uncertainty in China have injected considerable volatility into the country's healthcare stocks. It is important to note that the healthcare sector is already highly regulated. Over the past decade, Chinese healthcare companies have become accustomed to complying with strict regulations in all areas of their operations (R&D, regulatory approval processes, marketing, commercialization, pricing, etc.). Access to high-quality healthcare products and services that ordinary citizens can afford is one of the Chinese government's top priorities, especially against the backdrop of a rapidly aging population.

Most of the Chinese stocks in the portfolio published excellent half-year results. Wuxi Biologics reported first-half sales growth of 127% y-o-y. It added 79 new molecules to its R&D pipeline and is now working on more than 400 integrated projects. Wuxi was able to win 12 new molecules from competing suppliers. Shangdong Weigao reported first-half sales growth of more than 19%. Biotech company Innovent published strong growth numbers for its leading PD-1 inhibitor Tyvyt despite increasing competition in the wake of last year's NRDL negotiations. Innovent now has 2 000 sales representatives covering more than 4 700 hospitals in China.

Apollo Hospitals, an Indian healthcare services provider, reported an impressive 18% increase in revenues and EBITDA for the second quarter, clearly topping market expectations. COVID-19-related services such as vaccines and diagnostic tests made a particularly surprising contribution to this growth. Its shares were marked sharply higher on the day of the earnings announcement and we realized profits on this strength.

In August positions were opened in Weigao, Mindray, Cansino Biologics and Joinn Laboratories and existing positions in Wuxi Biologics, Hygeia, Innovent and Zhifei were increased. Akeso, Venus Medtech and Lupin are no longer in the portfolio and positions in ZaiLab and Glenmark were trimmed.

The fastest growing countries in the world can be found in emerging markets and they contain more than half of the world's population. Asian emerging markets are also forecast to account for more than 50% of global GDP by 2050. It is known that the economic growth model of countries shifts from manufacturing to the services sector as household incomes rise. A growing middle class fuels demand for modern medicine. Healthcare ranks increasingly high on their wish list. Billions are being invested in infrastructure, technology and research to modernize the healthcare systems in emerging market countries. This is giving a broader access to better healthcare. Meanwhile rapid population aging is also increasing demand for healthcare. In 30 years’ time there will be 400 to 500 million people over 60 in China alone, and they will have a growing need for modern health services and medicines.

Outside Asia, Brazil’s rapidly expanding private-sector healthcare market offers a range of interesting investment opportunities. The quality and long waiting times of the country’s public health system are no longer acceptable to many higher-income Brazilian households and they are increasingly embracing these new services offered by private-sector healthcare providers. Hospital chains embedded in a fully-integrated ecosystem are but one example of the beneficiaries of this structural change. The fund serves as a defensive vehicle for capturing the above-average growth potential emerging markets offer. It invests in the entire healthcare system value chain, from hospital chains, drug developers and device manufacturers to medical research specialists and digital health companies.

Past performance is not a reliable indicator of future results and can be misleading. As the sub-fund is denominated in a currency that may differ than an investor’s base currency, changes in the rate of exchange may have an adverse effect on prices and incomes. Performance is shown net of fees and expenses for the relevant share class over the reference period. All performance figures reflect the reinvestment of dividends and do not take into account the commissions and costs incurred on the issue and redemption of shares, if any. Individual costs are not taken into account and would have a negative impact on the performance. With an investment amount of EUR 1,000 over an investment period of five years, the investment result in the first year would be reduced by the front-end load of up to EUR 50 (5%) as well as by additional individual custody charges. In subsequent years, the investment result would also be reduced by the individual custody account costs incurred. The reference benchmark of this class is used for performance comparison purposes only (dividend reinvested). No benchmark is directly identical to a sub-fund, thus the performance of a benchmark is not a reliable indicator of future performance of the sub-fund it is compared to. There can be no assurance that a return will be achieved or that a substantial loss of capital will not be incurred. All figures in base currency in %, calculated by the total return / BVI method.Show moreShow less

  • Lead Portfolio Manager

    Oliver Kubli

    Oliver Kubli has been Managing Director, Head Portfolio Management Healthcare Funds & Mandates since 2015. Previously, he worked as Senior Portfolio Manager at Zürcher Kantonalbank and was a member of the Executive Board and Head Portfolio Management at Adamant Biomedical Investment AG. He completed his studies in business administration at the Zurich University of Applied Sciences in Winterthur and is a CFA charterholder.
  • Portfolio Manager

    Cyrill Zimmermann

    Dr. Cyrill Zimmerman is Head of Healthcare Funds & Mandates and a member of the Executive Board of Bellevue Asset Management. He founded Adamant Biomedical Investments in 2001 and managed the investment boutique until its acquisition by Bellevue in 2014. Cyrill Zimmerman holds a PhD from the University of Zurich.
  • Portfolio Manager

    Remo Krauer

    Remo Krauer has been a Senior Portfolio Manager Healthcare Funds & Mandates at Bellevue Asset Management since 2018. Previously, he worked at Zürcher Kantonalbank, first as Senior Portfolio Manager, then as Head Portfolio Construction for Private Asset Management. He holds a Bachelors degree in Business Administration from the Zurich University of Applied Sciences.
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