Bellevue Emerging Markets Healthcare

Emerging markets posted positive returns in February, driven by a 20.4% surge in South Korea’s Kospi Index, while Brazil’s Ibovespa rose 6.5% and China’s CSI 300 gained 1.5%. India’s Nifty 50 edged up 0.3%, whereas Hong Kong’s Hang Seng Index fell -2.9%. Overall, the MSCI Emerging Markets Index advanced 5.5% for the month.

Emerging-market healthcare stocks gained 2.9% this month, trailing the broader equity market, as political risk tied to the proposed BioSecure Act between the US and China continued to weigh on sentiment while investors awaited an updated list of impacted companies. The Bellevue Emerging Markets Healthcare Fund rose 3.2%, outperforming its benchmark.

Celltrion (+15.1%), Max Healthcare (+15.0%), Sun Pharma (+10.4%), WuXi Biologics (+8.5%), and Bumrungrad Hospital (+1.5%) ranked among the fund’s top contributors. Celltrion posted a solid quarter. Results were pre-announced, and the final release confirmed stronger sales driven by new products and margin expansion. Max Healthcare reported a softer quarter due to one-off seasonality and insurance-related disruptions. These temporary factors are expected to fade, and recent share price weakness created an attractive entry point. Sun Pharma delivered a strong quarter, with robust revenue and margin performance, alleviating prior concerns about growth from its innovative portfolio and cost base. WuXi Biologics pre-announced full-year results that exceeded expectations, and a healthy project backlog underpins the growth outlook. Bumrungrad Hospital reported results in line with expectations. Low single-digit growth this quarter was clearly flagged due to seasonality, while a special dividend supported investor sentiment.

Dr Sulaiman Hospital (-11.2%), Hansoh (-9.6%), Sino Biopharm (-9.0%), BeOne (-7.1%), and Akeso (-3.3%) were the largest detractors from absolute performance. Dr Sulaiman Hospital’s quarterly results were slightly disappointing due to margin contraction. Several Hong Kong biotech names declined during the month alongside the broader Hong Kong healthcare market, primarily driven by profit-taking following strong momentum in prior periods. These included Hansoh, Sino Biopharm, and Akeso. These stocks tend to be more volatile and had previously attracted positive inflows, making them more susceptible to profit-taking. BeOne reported results in line with expectations; however, expectations for its key drug, Brukinsa, in blood cancer remain high, which put pressure on the stock.

All performance data in USD/B shares.

Emerging markets are home to some of the world’s most dynamic growth economies and account for more than half of the global population. By 2050, Asian emerging economies are expected to generate over 50% of global economic output. As incomes rise, many of these economies are shifting from industry-led growth toward service-driven models. A growing middle class is fueling demand for modern medicine, as health becomes an increasingly important priority. Substantial investments in infrastructure, technology, and research are accelerating the modernization of healthcare systems, broadening access to higher-quality care. At the same time, demographic shifts are adding to demand. In 25 years’ time, China alone is expected to have nearly 400 million people over the age of 65, creating a significant need for advanced healthcare services and medicines.

Beyond Asia, attractive investment opportunities are also emerging in Brazil’s rapidly expanding private healthcare market. As the public healthcare system continues to struggle with quality and long waiting times, many affluent Brazilians are increasingly turning to private providers for better services. One notable example of beneficiaries of this trend can be found in hospital chains, which are building vertically integrated ecosystems to capture sustainable long-term growth.