Bellevue Emerging Markets Healthcare

Emerging markets’ performance was mixed in October, with strong gains in South Korea offset by weakness in Hong Kong and China. South Korea’s Kospi jumped 17.8%, India’s Nifty 50 rose 4.7%, and Brazil’s Ibovespa gained 1.0%. In contrast, Hong Kong’s Hang Seng Index fell 3.4%, and China’s CSI 300 was little changed, edging up 0.2%. Overall, the MSCI Emerging Markets Index advanced 4.2% for the month.

Emerging-market healthcare stocks fell 2.2% in October, underperforming the broader equity market. While the favorable Pfizer deal eased concerns over the most-favored-nation (MFN) pricing model in the US, Asian pharmaceutical companies benefited less than their US and European counterparts. Sentiment weakened further after the US Senate approved an amendment to the National Defense Authorization Act for FY 2026 on October 9 that included its version of the Biosecure Act, though no specific companies were named. The Bellevue Emerging Markets Healthcare Fund declined 3.4%, trailing its benchmark.

Samsung Biologics (+20.3%), Divi’s Laboratories (+18.5%), Sun Pharmaceutical (+6.1%), Alteogen (+4.7%), and Apollo Hospitals (+3.7%) were among the top contributors to the fund’s absolute performance. Samsung Biologics had another strong month after confirming that its fourth plant has been operational since Q2 2025 and will begin contributing to revenue in Q3. Divi’s Laboratories, a leading Indian contract development and manufacturing organization (CDMO), benefited from uncertainty surrounding Chinese CDMOs after the US Senate passed its version of the Biosecure Act. Sun Pharmaceutical benefited from the Pfizer deal mentioned above. Alteogen gained momentum after the recent approval of the subcutaneous version of Keytruda, a top-selling cancer drug. The formulation, developed jointly by Alteogen and Merck, highlights the strength of Alteogen’s platform technology.

Akeso (-19.6%), Sino Biopharm (-13.0%), WuXi Biologics (-11.6%), Innovent (-9.6%), and BeOne (-9.4%) were the largest detractors from the fund’s absolute performance. Akeso’s phase 3 China HARMONi-6 data was positive, with ivonescimab (AK112) showing a strong progression-free survival (PFS) benefit at the high end of expectations, but the company amended the HARMONi-3 trial protocol. Shares of Sino Biopharm fell amid a slowdown in China’s biotech out-licensing activity, though the company remains in talks to out-license several key drugs. WuXi Biologics continues to show strong fundamentals, but political risk related to the Biosecure Act continues to drive short-term share price volatility. Innovent shares declined after the company’s out-licensing deal with Takeda for two key assets, IBI363 (cancer immunotherapy) and IBI343 (gastric and pancreatic cancers), fell short of investor expectations. While the deal carried a headline value of USD 11 bn, the choice of partner caught investors off guard.

All performance data in USD/B shares.

Emerging markets are home to some of the world’s most dynamic growth economies and 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 industrial-led growth toward service-driven models. A growing middle class is fueling demand for modern medicine, as health becomes an increasingly important priority. Massive 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 health services and medicines.

Beyond Asia, attractive investment opportunities are also emerging in Brazil’s rapidly expanding private healthcare market. As the public healthcare system struggles 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.