Bellevue Medtech & Services (CH)
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
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: 19.01.2022)
NAV: CHF 3'809.87 (18.01.2022)
Rolling performance (18.01.2022)
|18.01.2021 - 18.01.2022||10.68%||13.09%|
|18.01.2020 - 18.01.2021||9.35%||9.94%|
|18.01.2019 - 18.01.2020||19.67%||22.80%|
|18.01.2018 - 18.01.2019||16.32%||7.77%|
Annualized performance (18.01.2022)
|Since Inception p.a.||12.31%||11.37%|
Cumulative performance (18.01.2022)
Facts & Key figures
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. A global network of experts spanning scientific and industrial fields supports the Management Team in forming opinions and making investment decisions. The selection of the portfolio companies is entirely bottom-up, independent of benchmark weightings.Show moreShow less
Investment suitability & Risk
|Investment Manager||Bellevue Asset Management AG|
|Fund Administrator||Swisscanto Fondsleitung AG|
|Auditor||Ernst & Young AG|
|Year end closing||30. Sep|
|NAV Calculation||Daily "Forward Pricing"|
|Cut of time||15:00 CET|
|Subscription Fee (max.)||2.50%|
|Performance Fee||10.00% (with High Water Mark)|
Key data (31.12.2021, base currency CHF)
|No. of positions||45|
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.
- 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 in financial instruments that might 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.
- Increased opportunities through possible derivative transactions go hand in hand with increased risk of loss
Review / Outlook
The Bellevue Medtech & Services Fund (CH) returned 7.3% in December. The fund lagged its benchmark (+8.2%) but clearly outperformed the broader healthcare sector (+6.3%) and the overall stock market (+3.3%). Healthcare services providers contributed 3.7% to the fund's monthly performance, medtech stocks 3.6%.
The past month was dominated by developments related to the Omicron variant of the coronavirus that is spreading at lightning speed but, according to data from South Africa and England, causes less severe disease.
US health insurers Cigna (+19.1%), Centene (+14.3%), Anthem (+13.3%), UnitedHealth (12.3%) and Molina (+10.5%) were strong performers last month. UnitedHealth and Centene pleased investors with their annual capital market presentations and upgraded guidance for 2022, which buoyed investor sentiment towards the entire US health insurance industry. Investors also assume that the milder symptoms associated with Omicron and the rising levels of population immunity will lead to fewer hospital admissions percentage-wise than during previous waves of infection. This means hospitalization costs related to coronavirus infections should also be lower. Rising bond yields and higher inflation expectations are also known to be a very constructive environment for US health insurers. Higher yields should lift their investment income, while higher inflation expectations should have a positive impact on premium.
HCA Healthcare (+13.0%), the largest operator of healthcare facilities in the US and which is also led by excellent management, should likewise benefit from the less severe course of COVID-19 associated with Omicron.
Although the Digital Health company Phreesia (-28.5%) met investor expectations regarding third-quarter sales growth, its guidance for 2022 fell short of expectations due to sharply higher operating expenses.
In the medtech space, our positions in Edwards Lifesciences (+19.6%), Tandem Diabetes (+16.0%), Abbott (+10.8%) and Boston Scientific (+10.5%) delivered a positive contribution to portfolio performance in relative and absolute terms. On its investor day, Edwards Lifesciences’ forecast of strong sales in 2022 and a promising product pipeline update surprised investors. Diabetes pump manufacturer Tandem presented its ambitious but realistic product pipeline at its investor event and plans to increase the number of patients using its products to one million over the next 5 years, which is more than triple its current global customer base. Tandem's share price was also marked up after Insulet (-8.6%) announced an unexpected delay in the FDA approval of its Omnipod 5 insulin pump and after Medtronic (-3.4%) received an FDA warning letter that will very likely delay the approval of its new 780G insulin pump. Very strong demand for Abbott's (+11.9%) highly profitable COVID-19 tests is expected due to Omicron.
Vaccination rates in key medtech & ervices markets (North America, Europe and Japan) showed further increases at the end of December. In major Western European countries and in the US, 21% to 50% of the eligible population has already received a booster shot.
The widespread availability of COVID-19 vaccines, the rapidly growing number of people who have recovered from a coronavirus infection and the availability of oral antiviral drugs that will reduce the need for emergency or hospital care are important prerequisites for an upturn in elective interventions in 2022. We believe the astonishing spread of the Omicron variant will speed up progress towards herd immunity on a global scale. Whether that means the pandemic will end more quickly remains to be seen.
We spoke with executives from approximately 35 Medtech & Services companies in December during the course of two virtual conferences and a research trip to the US. A majority of them were positive in their statements regarding the fourth quarter and the 2022 fiscal year, which makes us very confident about 2022.
In the healthcare services segment, we believe US health insurers offer the most upside potential. Major value drivers are progressive privatization (Medicare Advantage, Medicaid), a larger pool of insured persons (commercial), the vertical integration of services providers, and efficiency gains (digitalization reduces administrative costs). Hospitals stand to benefit from the normalization of elective procedures. We see substantial upside potential in medtech stocks thanks to their strong innovation, which is particularly evident in the latest products for diabetes therapy, minimally invasive heart valve repair and replacement procedures, and surgical robots.
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