Bellevue Digital Health (Lux)
Portfolio consisting of high-quality growth stocks showing double-digit revenue growth
Regulation and stringent quality requirements limit the technological risk
Demographic changes and an aging general population demand greater efficiency and cost-effectiveness
Explained in 90 seconds
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The fund invests globally at least two-thirds of the portfolio in companies whose business activities have a strong focus on the digitalization of the healthcare sector. A global network of experts spanning scientific and industrial fields support the Management Team in forming opinions. The selection of portfolio companies is bottom-up.
Indexed performance (as at: 01.12.2023)
NAV: USD 157.24 (30.11.2023)
Rolling performance (30.11.2023)
|30.11.2022 - 30.11.2023||-18.60%||n.a.|
|30.11.2021 - 30.11.2022||-25.63%||n.a.|
|30.11.2020 - 30.11.2021||-1.35%||n.a.|
|30.11.2019 - 30.11.2020||52.44%||n.a.|
Annualized performance (30.11.2023)
|Since Inception p.a.||4.19%||n.a.|
Cumulative performance (30.11.2023)
Facts & Key figures
The fund’s aim is to achieve capital growth in the long term. The fund invests globally at least two-thirds of the portfolio in companies whose business activities have a strong focus on the digitalization of the healthcare sector. A global network of experts spanning scientific and industrial fields support the Management Team in forming opinions. The selection of portfolio companies is bottom-up. The fund takes ESG factors into consideration while implementing the aforementioned investment objectives.Show moreShow less
Investment suitability & Risk
|Investment Manager||Bellevue Asset Management AG|
|Custodian||CACEIS Investor Services Bank, Luxembourg|
|Fund Administrator||CACEIS Investor Services Bank, Luxembourg|
|Year end closing||30. Jun|
|NAV Calculation||Daily "Forward Pricing"|
|Cut of time||15:00 CET|
|Subscription Fee (max.)||5.00%|
|Total expense ratio (TER)||1.47% (31.10.2023)|
|Legal form||Luxembourg UCITS V SICAV|
|SFDR category||Article 8|
Key data (31.10.2023, base currency USD)
|No. of positions||36|
Top 10 positions
Benefits & Risks
- Demographic changes and an aging general population demand greater efficiency and cost-effectiveness.
- New technologies conquer the healthcare sector.
- Portfolio consisting of high-quality growth stocks showing double-digit revenue growth.
- Regulation and stringent quality requirements limit the technological risk.
- Bellevue – Healthcare pioneer since 1993 and today one of the biggest independent investors in the sector in Europe.
- The fund invests in equities. Equities are subject to price fluctuations and so are also exposed to the risk of price losses.
- The fund invests in foreign currencies, which means a corresponding degree of currency risk against the reference currency.
- The fund may invest a proportion of its assets in financial instruments that might under certain circumstances have a relatively low level of liquidity, which can in turn affect the fund’s liquidity.
- Equities linked to technology and/or digitization can be subject to higher-than-average fluctuations in value.
- The fund may engage in derivatives transactions. The increased opportunities gained come with an increased risk of losses.
Review / Outlook
Ten-year US Treasury yields extended their upward trend from the previous month and closed October at a multi-year high of 4.93%, up 36 basis points. We think this is the main reason for the negative performance of growth stocks and, by extension, of the Digital Health Fund portfolio. Many investors use discounted cash flows (DCF) to determine the valuation of small and mid-cap stocks and rising bond yields lead to lower valuations in these models.
Of the 39 portfolio companies, Olink (+68.9%), Yidu Tech (+4.3%), Shockwave (+3.6%) and Ping An Healthcare and Technology (+0.2%) made positive contributions to portfolio performance. Thermo Fisher announced the acquisition of Olink, a leading provider of proteomics solutions, in October. It offered Olink shareholders USD 26 per share in cash, a premium of 74% vs the previous close. Shockwave, a company specializing in intravascular lithotripsy for the treatment of cardiovascular diseases, announced new groundbreaking products at its investor day. Shockwave’s sales forecast for 2026 and its addressable market projection, which was almost doubled from USD 8.5 to USD 15 bn, were also positive surprises.
After an interim analysis, Novo Nordisk decided to stop its “FLOW” trial of semaglutide in patients with type 2 diabetes and chronic kidney disease study ahead of schedule because the results were so positive. This news triggered heavy selling in the shares of dialysis companies such as Outset Medical (-67.6%) and even across the broader medical technology sector, for instance in TransMedics (-31.9%), Inspire Medical (-25.8%), Penumbra (-21.0%), Procept BioRobotics (-18.3%), Insulet (-16.9%), Axonics (-8.7%) and Globus Medical (-7.9%). We think the market has overreacted to this news and doubt that the correction will be long-lasting.
Although Dexcom’s (-5.3%) third-quarter sales and earnings beat expectations and management increased its guidance for 2023, the stock was unable to make a positive contribution to the fund’s performance. Intuitive Surgical (-10.8%) also surprised investors by reporting higher-than-expected procedure volumes and an increase in robotic surgery system sales for the third quarter, but it detracted from portfolio performance, too. Axonics also beat consensus estimates for Q3 and raised its guidance for the full year 2023.
Reported sales at Teladoc Health (-11.5%) topped its management’s forecast but not investor expectations. Accolade (-38.9%) likewise reported better-than-expected sales and earnings but it didn’t raise its full-year forecast.
There were also some negative company-specific news flow in October. Outset Medical’s third-quarter sales missed street expectations and management lowered its forecast for 2023, disappointing investors. Align Technology (-39.9%) also fell short of investor expectations for the third quarter, which it blamed on deteriorating consumer sentiment in the US. All performance data is in USD / B shares.
The fund's investment strategy is focused on innovative market leaders and solidly financed companies. More than 95% of the companies in the portfolio have no immediate financing needs. Companies in the highly regulated and non-cyclical healthcare market also benefit from the industry’s high entry barriers. The portfolio contains fast-growing, disruptive companies that are applying digital technology to improve healthcare delivery and outcomes while making healthcare more cost-effective. In addition, the companies in the Digital Health Fund's portfolio are expected to generate high double-digit sales growth rates over the coming years and visibility is good.
The growing acceptance of digital solutions in the wake of the pandemic has pushed up the potential growth trajectory of the digital health investment case. Equity capital investors have invested about USD 109 bn in more than 4 700 privately held digital health firms since 2011, so we expect a steady stream of attractive IPOs in the coming years – another reason, and an important one, for investing in this sector.
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 1000 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