Bellevue Medtech & Services (Lux)
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
Explained in 90 seconds
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: 27.01.2023)
NAV: EUR 692.47 (26.01.2023)
Rolling performance (26.01.2023)
|26.01.2022 - 26.01.2023||0.93%||-5.54%|
|26.01.2021 - 26.01.2022||6.88%||4.79%|
|24.01.2020 - 26.01.2021||5.54%||10.83%|
|25.01.2019 - 24.01.2020||27.32%||34.57%|
Annualized performance (26.01.2023)
|Since Inception p.a.||13.72%||15.16%|
Cumulative performance (26.01.2023)
Facts & Key figures
The fund’s aim is to achieve capital growth in the long term. The Fund invests worldwide in companies active in the medical technology and healthcare services sector. Aim is to provide investors an attractive Healthcare Fund 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.
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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||15:00 CET|
|Subscription Fee (max.)||5.00%|
|Total expense ratio (TER)||2.15% (30.12.2022)|
|Legal form||Luxembourg UCITS V SICAV|
|SFDR category||Article 8|
Key data (30.12.2022, base currency EUR)
|No. of positions||47|
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 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.
- 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
After advancing for a couple months, stocks consolidated in the final month of the year. Global equities headed south in December (MSCI World Net -7.8%), as did the Euro Stoxx 50 (-4.0%) and Germany’s DAX index (-3.3%). The Bellevue Medtech & Services Fund (-4.4%) and its benchmark (MSCI World Healthcare Equipment & Supplies -4.2%) were unable to escape the market’s downward pull but they still performed relatively well despite some weakness in the US dollar (US Dollar Index DXY -2.3%). Downside support came from the healthcare sector’s traditionally favorable position in the face of a looming recession.
Looking back on a challenging investment year, the Bellevue Medtech & Services Fund
(-12.0%) clearly outperformed its benchmark (MSCI World Healthcare Equipment & Supplies -19.8%) in 2022 and was in line with global stocks (MSCI World Net -13.0%), Germany's blue-chip DAX (-12.7%), and the all-share Swiss equity index (-12.5%), but it did lag the Euro Stoxx 50 (-8.6%).
While it is pleasing to see that our investment strategy produced good results with its focus on commercially successful medtech companies that are also innovation leaders and on healthcare services providers such as US health insurance companies, we had hoped to beat the entire market given the fundamentals of the medical technology sector. Performance in the first half was held back on the one hand by macro factors such as the renewed wave of coronavirus infections in the spring and the resulting constraints that produced, also in the healthcare sector. On the other hand, the rapid rise in interest rates in the USA and the resulting sharp decline in the valuation multiples of innovative growth companies also prevented the fund from delivering a better performance.
We are confident that company-specific business developments will play a greater role in the performance of individual stocks in 2023. The significant progress that companies have achieved should attract more attention again as the macro environment becomes less unpredictable. Many companies are on the verge of receiving regulatory approvals and launching major new products and services, particularly in the areas of structural heart disease, diabetes, neurostimulation and surgical robotics. We expect a significant acceleration in M&A activity in 2023 too. Potential targets are trading on attractive valuations and large medtech companies have lots of cash to spend.
In contrast to most other industries, the current consensus that a recession lies ahead is a positive factor for medtech & services. Whereas companies in many sectors report weaker sales during recessions, historical data shows that the healthcare sector is largely unaffected by the cyclical fluctuations in overall economic activity. Even if demand in the medtech & services sector does ease a bit due to recessionary forces, the release of pent-up demand in the wake of the pandemic will provide some support. Investors will nevertheless keep a close eye on US interest rate developments. That said, compared to January 2022, we are already confronted with much higher interest rate levels.
The J.P. Morgan Healthcare Conference, the premiere investor event for healthcare stocks, is scheduled for early January. Many companies will present preliminary results for the fourth quarter of 2022 and give an initial outlook for the coming fiscal year. All in all, we believe the medtech & services sector is very well positioned for the coming investment year, both in relative and absolute terms. All performance data is in EUR / B shares.
Hospitalization rates in key medtech & services markets fell quickly and steeply. We believe that high immunity levels will enable a significant rebound in elective medical procedures in 2023. The sector’s risk-return profile is enticing for many investors. Regardless of when the pandemic and the geopolitical situation returns to normal, the sector-specific structural growth factors such as rising life expectancy and high rates of innovation will sustain the medtech & services sector's above-average growth versus the overall economy and power its high rates of profit growth.
Moderate sector valuations spell opportunities, and not only for investors. We anticipate an increase in M&A activity because the valuation multiples of many promising, fast-growing companies have declined so much. The Medtech & Services Fund invests in the entire healthcare market except for the drug developers. As a fully adequate healthcare investment vehicle, the fund aims to generate a significantly higher return than a traditional healthcare fund but with a comparable risk profile.
The medtech & services sector is one of the stock market's most defensive sectors with sustainable outperformance potential. This and the additional growth from non-emergency treatments that had to be postponed during the pandemic create attractive entry points for investors.
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