Bellevue Medtech & Services (CH)
Medtech & Services is an investment in 10% of global gross domestic product: Healthcare sector excluding drugs
Bottom line: above-average and steady growth compared to the broad market
Focusing on profitable, liquid mid and large cap companies with an established product portfolio
Please find a more detailed description of share classes here.
The Fund invests worldwide in companies active in the medical technology and healthcare services sector. Stock selection is based on fundamental company analysis, focusing in particular on the medical benefits and the potential savings for the healthcare system as well as the expected market potential of a company’s products and services.
Indexed performance (as at: 02.10.2023)
NAV: CHF 3'286.21 (28.09.2023)
Rolling performance (28.09.2023)
|28.09.2022 - 28.09.2023||-4.69%||-0.26%|
|28.09.2021 - 28.09.2022||-10.44%||-10.27%|
|28.09.2020 - 28.09.2021||27.85%||28.96%|
|27.09.2019 - 28.09.2020||14.95%||12.68%|
Annualized performance (28.09.2023)
|Since Inception p.a.||7.94%||7.86%|
Cumulative performance (28.09.2023)
Facts & Key figures
The fund invests worldwide in companies active in the medical technology and healthcare services sector. Aim is to provide investors an attractive solution by investing in the entire healthcare universe with the exclusion of drug makers. Experienced sector specialists focus on profitable, liquid mid and large cap companies with an established product portfolio as well as fast growing small cap companies with leading-edge technology offering. Stock selection is based on fundamental company analysis, focusing in particular on the medical benefits and the potential savings for the healthcare system as well as the expected market potential of a company’s products and services.The selection of the portfolio companies is entirely bottom up, independent 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|
|Fund Administrator||Swisscanto Fondsleitung AG|
|Auditor||Ernst & Young AG|
|Year end closing||30. Sep|
|NAV Calculation||Daily "Forward Pricing"|
|Cut of time||15:00 CET|
|Subscription Fee (max.)||2.50%|
|Performance Fee||10.00% (with High Water Mark)|
|Legal form||Investment funds under Swiss law|
|SFDR category||Article 8|
Key data (31.07.2023, base currency CHF)
|No. of positions||33|
Top 10 positions
Breakdown by sector
Benefits & Risks
- Digitalization of the healthcare sector is boosting medtech companies’ growth and earnings.
- Focusing on profitable, liquid mid and large-cap companies with an established product portfolio as well as on rapidly growing small-cap businesses delivering cutting-edge technology.
- Managed care profits from the privatization of the health insurance sector and lower treatment costs.
- Minimally invasive techniques gaining ground – shorter treatment times reduce healthcare costs.
- 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 in financial instruments that might have a relatively low level of liquidity, which can in turn affect the fund’s liquidity.
- Investing in emerging markets entails the additional risk of political and social instability.
- The fund may engage in derivatives transactions. The increased opportunities gained come with an increased risk of losses.
Review / Outlook
Investments in medical technology stocks detracted from fund performance even though these companies increased their full-year guidance and published very good quarterly results that in most cases beat street expectations. These earnings announcements were impressive proof of the strong rebound in surgical procedure volumes, but it seems that short-term investors used the clearly positive announcements to take profits after the medtech sector's good performance in the previous month. A weaker US dollar versus the Swiss franc (-2.6%) also weighed on the fund's performance.
Among the medtech names that have already published their results, some showed constructive returns, such as Abbott (-0.3%) and Axonics (+16.2%), whereas others were a drag on monthly performance although their latest quarterly results were very solid. The latter include Boston Scientific (-6.8%), Dexcom (-5.8%), and Intuitive Surgical (-7.8%). Edwards Lifesciences (-15.4%) was the only medtech holding whose results were in line with expectations, i.e. not better than expected. Some medtech companies that have not yet published their quarterly results, Penumbra (-14.3%), Inspire Medical (-13.8%) and Shockwave (-11.3%) for example, also fell on profit-taking. Tandem Diabetes (+38.3%), IDEXX (+7.3%) and Align (+3.8%) had a positive impact on portfolio performance. Shares of the Life Sciences Tools companies Danaher (+3.3%) and Thermo Fisher (+2.2%) also performed well. Although both of these companies slashed their projections for the 2023 fiscal year, investors concluded that they have hit bottom. We share this assessment.
Healthcare services providers performed well overall in the face of the general environment. Although HCA Healthcare (-12.6%), the largest healthcare provider in the US, published a solid set of Q2 results that clearly confirmed the strong recovery in procedures and a declining trend in personnel costs, its shares were marked down. Reported medical costs at US health insurers Elevance (+3.2%), United Health (+0.4%) and Humana (-0.7%) came in at the upper end of expectations, but they were stable and did not show any deterioration during the past two months. Higher investment income and, above all, the optimistic statements about premium pricing developments and the confirmation of earnings per share (EPS) guidance for fiscal 2024 helped to ease investor concerns. Cigna (+2.2%) also benefited indirectly from this news, and two other US insurers that are more focused on Medicaid, Molina (-1.8%) and Centene (-1.9%), also mentioned that business was in line with expectations and that no additional challenges were discernible with respect to 2024. All performance data is in CHF; AA shares.
For medtech companies, we expect procedure volumes will be back to normal levels by the end of 2023, supported by the expansion of treatment capacity at hospitals. Further upside potential is possible considering the current backlog of delayed procedures and could unfold over a period of several years. We assume pricing power will improve, i.e. prices are unlikely to change, whereas during the previous 10 years medtech companies experienced a price erosion of 1-2% p.a. Better cost management and strong sales growth are therefore likely to lead to better profit margins. Attractive catalysts ranging from new product launches (e.g. Pascal Precision, Dexcom G7, Omnipod 5) and groundbreaking clinical trial results (e.g. ADVENT) to first-time reimbursements (e.g. for CardioMEMS, CGM sensors for type 2 diabetes patients requiring basal insulin therapy) will provide additional upswing.
We think a recession is possible in 2023. Medtech & services stocks tend to outperform in a recessionary environment.
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