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: 02.06.2023)
NAV: CHF 3'400.55 (31.05.2023)
Rolling performance (01.06.2023)
|01.06.2022 - 01.06.2023||-1.54%||-3.91%|
|01.06.2021 - 01.06.2022||-0.50%||3.35%|
|29.05.2020 - 01.06.2021||16.79%||18.78%|
|31.05.2019 - 29.05.2020||15.50%||16.18%|
Annualized performance (01.06.2023)
|Since Inception p.a.||8.44%||8.16%|
Cumulative performance (01.06.2023)
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 (31.05.2023, base currency CHF)
|No. of positions||40|
Top 10 positions
Breakdown by sector
Opportunities & 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
The fund's performance in April was mainly fueled by better-than-expected first-quarter earnings announcements. A stronger-than-expected upturn in procedure volumes and strict cost management were the main factors behind the positive surprises.
HCA Healthcare (+6.4%), the largest hospital operator in the US with 182 clinics in 20 states, made a positive contribution to the fund's absolute and relative performance. HCA beat the consensus profit forecast thanks to a strong recovery in surgical procedures and lower personnel costs and its management raised its sales and earnings guidance for 2023.
US health insurers Molina (+8.7%), Humana (+6.7%), Centene (+6.5%), UnitedHealth (+1.7%), Elevance (-0.5%) and Cigna (-3.2%) showed mostly positive returns, which is also reflected in their contribution to the portfolio’s absolute and relative performance. All US health insurers except for Cigna have released their first-quarter results. Earnings were better than expected and management earnings guidance for 2023 was increased across the board. This confirms our assumption that these management teams astutely factored a recovery in surgical treatments into the offered insurance premiums. Joe Biden's announcement that he would seek a second term portends less political risk for health insurers.
Rumors that Boston Scientific (+1.7%) would issue a public takeover bid for the medical technology company Shockwave Medical (+30.7%) propelled the latter’s stock to higher ground. Shockwave is a developer of intravascular lithotripsy technology (IVL) used to treat patients with calcified peripheral and coronary blood vessels.
In the medtech space, Intuitive Surgical (+15.1%), Inspire Medical (+11.6%), Abbott (+7.1%), Edwards Lifesciences (+3.8%) and Boston Scientific made positive contributions to the portfolio's absolute and relative performance. First-quarter results from the large-cap and broadly diversified companies Intuitive, Abbott, Edwards Lifesciences and Boston Scientific were well above the projected top and bottom line numbers in some cases, which can be traced to a sharp upturn in surgical treatments. These companies also raised their sales and profit guidance for 2023. A significant improvement in nursing staff levels, reduced mortality among the elderly and less fear among the same population segment of contracting COVID-19 in a hospital setting were cited as the main drivers behind the strong rebound in surgical procedures.
Align Technology (-4.9%), the market leader for transparent teeth aligner systems, was unable to meet excessively high investor expectations.
Life sciences tools companies Danaher (-8.2%) and Thermo Fisher (-6.0%) had a negative impact on the performance. Danaher dialed back its 2023 growth forecast for its bioprocessing business due to the drop in demand from biotech and pharmaceutical companies. Thermo Fisher did not revise its sales forecast, but it too has been impacted by a drop in demand from drug manufacturers.
For medtech companies, we expect treatment volumes will be back to normal levels by the end of 2023, given the high levels of immunity and improved staffing conditions at hospitals. Additional upside is certainly possible considering the current treatment backlogs. 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