Bellevue 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
Explained in 90 seconds
Please find a more detailed description of share classes here.
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: 27.01.2023)
NAV: USD 155.75 (20.01.2023)
Rolling performance (20.01.2023)
|20.01.2022 - 20.01.2023||-5.94%||-12.64%|
|20.01.2021 - 20.01.2022||-31.62%||-27.79%|
|20.01.2020 - 20.01.2021||54.39%||54.74%|
|18.01.2019 - 20.01.2020||13.50%||5.79%|
Annualized performance (20.01.2023)
|Since Inception p.a.||3.97%||0.62%|
Cumulative performance (20.01.2023)
Facts & Key figures
The fund’s aim is to achieve capital growth in the long term. The Bellevue Emerging Markets Healthcare fund invests in companies that have their registered office or carry out the majority of their economic activity in the healthcare markets of emerging countries. Its investment universe consists of generics producers, pharma and biotechnology 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, inde-pendent of benchmark weightings. 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||RBC Investor Services, Luxembourg|
|Fund Administrator||RBC Investor Services, Luxembourg|
|Year end closing||30. Jun|
|NAV Calculation||Daily "Forward Pricing"|
|Cut of time||09:00 CET|
|Subscription Fee (max.)||5.00%|
|Performance Fee||10.00% (with High Water Mark)|
|Total expense ratio (TER)||2.21% (30.12.2022)|
|Legal form||Luxembourg UCITS V SICAV|
|SFDR category||Article 8|
Key data (30.12.2022, base currency USD)
|No. of positions||42|
Top 10 positions
Opportunities & Risks
- 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.
- Bellevue Healthcare Team – top-performing pioneer in the management of healthcare portfolios in Emerging Markets.
- The fund invests in equities. 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.
- The fund invests in foreign currencies, which means a corresponding degree of currency risk against the reference currency.
- The subfund may invest in China A equities. This entails the risk of supervisory changes, volume caps and operating restrictions which may lead to a higher counterparty risk.
- 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.
Review / Outlook
The MSCI World index climbed higher in November, 7% in USD, extending the upward trend that began in the middle of October. Macroeconomic data continued to move the markets much more than company-specific news. Lower-than-expected October inflation numbers in the US were cheered by investors, for example, although inflation was still clocked at a high 8% yoy. Nevertheless, that data readout gave risk assets a big boost as it fueled hopes that the Fed would moderate the pace of its rate increases compared to its previous two FOMC meetings. Jerome Powell confirmed this market expectation shortly afterwards during a speech on November 30 when he flagged an increase of 50 basis points at the bank’s next policy meeting in December. Subsiding US inflation and falling bond yields weakened the dollar too, which helped lead stocks in emerging markets and the entire Asia-Pacific region to higher ground.
After the very negative reaction to the 20th National Congress of the Communist Party, stock markets in Hong Kong and mainland China turned positive in November on hopes that China’s economy would continue to gain momentum thanks to the gradual unwinding of government measures to control COVID-19. Even widespread protests against the government's zero-COVID policy, which were stamped out after a few days, were unable to hold back the market rally. Large-scale campaigns to encourage citizens to get vaccinated or boosted, especially those 80 and older, have been launched so that the traditional Chinese New Year celebrations at the end of January can still take place. The MSCI Emerging Markets Index surged 14.8% in the wake of these developments. The defensive healthcare sector was unable to keep pace with the broader market but still delivered a pleasing return of 10.1%.
The latest update from Hikma underscored the strong momentum in its two major business units – injectables (46% of sales/63% of EBIT) and branded (27% of sales/22% of EBIT). Management expects both units to deliver high single-digit sales growth during the coming years. Its third operating division, generics, is forecast to finally meet lowered expectations. Hikma's improved business outlook and pending announcement of a new CEO prompted us to open a position in its stock.
Early in November the fully vertically integrated Brazilian health insurer Hapvida presented its third-quarter results. They fell short of market expectations, unfortunately. EBITDA declined 18% from the prior-year figure. This was mostly blamed on pricing developments in its insurance portfolio. Hapvida was unable to increase premiums fast enough to compensate for higher costs associated with a rising number of consultations, especially for COVID-19 cases. Organic growth, on the other hand, was solid as the company attracted 122000 new policyholders. Nevertheless, we reduced the position somewhat in view of the latest operating results. We will keep the position in the portfolio, however, because we are confident that Hapvida has an excellent position in Brazil’s private healthcare market. Better quality at a reasonable cost makes Hapvida an attractive alternative to the country’s public healthcare system.
New positions were opened in Hikma, Apollo Hospitals, Microport, Zai Lab and Shanghai Fosun last month and existing positions in Aier Eye, Ali Health and Wuxi Apptec were topped up. Divi’s Laboratories, China Traditional Medicine, Kingmed and Shanghai Junshi are no longer in the portfolio and positions in JD Health, Legend Biotech, Zydus Lifesciences and Hapvida were reduced.
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 greater swath of the population access to better healthcare. Meanwhile rapid population aging is also stoking 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