Bellevue Digital Health

US labor market data for September, published in November, were mixed, while consumer sentiment weakened sharply. This increased the likelihood of another Fed rate cut in December. Historically, such an environment has provided a favorable backdrop for non-cyclical healthcare stocks and, in particular, for fast-growing digital health companies. The global equity market ended November slightly positive at +0.3%, while technology stocks declined by -1.6%. In contrast, the broader healthcare sector and the Bellevue Digital Health Fund posted strong gains of +8.1% and +9.4%, respectively.

Portfolio performance was broadly supported, with 23 of 36 positions closing higher. The strongest contributors were Exact Sciences (+56.6%), Globus Medical (+50.8%) and Penumbra (+28.9%), followed by Natera (+20.0%), 10x Genomics (+37.9%) and Inspire Medical (+72.6%).

Exact Sciences received a takeover offer from Abbott valued at USD 23 bn (including net debt). We expect M&A activity to accelerate meaningfully in 2026. Globus Medical clearly exceeded expectations with excellent third-quarter results. Integration of the Nevro acquisition is progressing faster than anticipated, and full-year guidance was raised. Penumbra likewise delivered better-than-expected Q3 results, increased its outlook and provided a positive update on the Thunderbolt system. Management noted strong customer interest in the recently published clinical data, which should support additional market share gains.

BillionToOne (+117.0%), a leading company in non-invasive prenatal diagnostics, completed its IPO during the month. The company has developed a differentiated and broadly applicable testing technology that could also be used in oncology.

Performance detractors included Omada (-23.8%), Veeva (-17.5%), Ambu Medical (-12.7%), Phreesia (-9.5%), Procept BioRobotics (-6.9%) and GN Store Nord (-8.1%). High expected investment spending in 2026 and related margin pressure weighed on Omada. Veeva beat quarterly expectations and raised its full-year guidance but sold fewer CRM systems to large pharma companies than anticipated. Ambu Medical missed analyst expectations for Q3, mainly on margins, and its initial targets for the next financial year were below expectations. All figures in USD / B shares.

From a fundamental perspective, digital health companies remain on a stable path toward above-average growth. This is supported by above-average growth in surgical procedure volumes and in hospital capital expenditure.

The approval and launch of relevant new products should continue to drive strong revenue growth. Examples include Intuitive Surgical’s new da Vinci 5 robotic surgical system, Veeva’s Vault CRM for highly efficient pharmaceutical marketing, Dexcom’s Stelo and G7 continuous glucose sensors, Procept BioRobotics’ Hydros robotic system for prostate tissue removal, Insulet’s Omnipod 6 patch insulin pump, Penumbra’s Thunderbolt system for computer-assisted vacuum thrombectomy and Globus Medical’s Excelsius Flex robotic navigation system.

We expect supportive conditions for our investment solution. In addition to innovation as the key value driver, attractive valuation levels and a pick-up in M&A and IPO activity support an investment in the Bellevue Digital Health Fund.