Bellevue Emerging Markets Healthcare

Emerging markets delivered positive returns in January, led by sharp gains in South Korea’s Kospi Index, which surged 23.4%, and Brazil’s Ibovespa, up 17.4%. Hong Kong’s Hang Seng Index rose 6.5% and China’s CSI 300 advanced 2.3%, while India’s Nifty 50 slipped 4.4%. Overall, the MSCI Emerging Markets Index climbed 8.9% for the month.

Emerging-market healthcare stocks rose 3.5% in January, underperforming the broader equity market, as political risk linked to the proposed BioSecure Act between the US and China continued to weigh on sentiment while investors awaited an updated list of affected companies. The list was expected in January but was not released, easing near-term pressure. The Bellevue Emerging Markets Healthcare Fund advanced 3.1%, slightly underperformed its benchmark.

PharmaEssentia (+63.6%), WuXi Biologics (+17.3%), BeOne Medicines (+14.8%), Celltrion (+14.6%) and CSPC (+13.5%) were among the fund’s strongest contributors. PharmaEssentia surged as its key drug BESREMi, already used in polycythemia vera, a blood disorder marked by excess red blood cells, is expected to gain label expansion in high-risk essential thrombocythemia, a condition involving abnormally high platelet counts, expanding the target patient population. WuXi Biologics pre-announced strong fourth-quarter results at the J.P. Morgan Healthcare Conference and expressed confidence in faster growth into fiscal 2026. BeOne Medicines rallied ahead of the conference as one of China’s largest biotech firms. Celltrion posted a solid earnings beat driven by growth in newer products, while CSPC advanced on speculation of a major business development deal with a global pharmaceutical company.

Cipla (-14.1%), Max Healthcare (-10.2%), Alteogen (-9.5%), Sun Pharma (-9.0%) and Divis Laboratories (-7.2%) were the largest detractors from absolute performance. Cipla declined after disappointing Q3 results, with profits down more than 50% yoy. Alteogen fell after announcing a smaller-than-expected deal with GSK and lower-than-anticipated royalty rates from Merck. Sun Pharma weakened on market speculation about a potential acquisition of US-based Organon, raising concerns about financial pressure, while Max Healthcare and Divis Laboratories declined in line with the broader Indian market amid recent volatility.

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.