Bellevue Medtech & Services (Lux)
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
Explained in 90 seconds
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: 29.09.2022)
NAV: EUR 162.91 (28.09.2022)
Rolling performance (28.09.2022)
|28.09.2021 - 28.09.2022||-4.60%||-17.34%|
|28.09.2020 - 28.09.2021||25.40%||27.77%|
|27.09.2019 - 28.09.2020||7.70%||12.52%|
|28.09.2018 - 27.09.2019||4.59%||12.15%|
Annualized performance (28.09.2022)
|Since Inception p.a.||8.58%||11.24%|
Cumulative performance (28.09.2022)
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|
|Custodian||RBC Investor Services, Luxembourg|
|Fund Administrator||RBC Investor Services, Luxembourg|
|Year end closing||30. Jun|
|NAV Calculation||Daily "Forward Pricing"|
|Cut of time||15:00 CET|
|Subscription Fee (max.)||5.00%|
|Total expense ratio (TER)||1.76% (31.08.2022)|
|Legal form||SICAV Luxembourg jurisdiction|
|SFDR category||Article 8|
Key data (31.08.2022, base currency EUR)
|No. of positions||49|
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 cuttingedge 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 strong 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 losses.
Review / Outlook
Stock markets began the month under review in the green but fell hard and fast at the end of the month. The sell-off was triggered by Jerome Powell's remarks that taming inflation was the Fed's top priority and that interest rates would likely be pointing up for longer than anticipated. The world stock market (MSCI World Net -2.8%), Germany's blue-chip Dax (-4.8%) and the Euro Stoxx 50 (-5.1%) all closed sharply lower as a result. The Bellevue Medtech & Services Fund (-3.3%) held its ground fairly well in the face this difficult environment, after already delivering a strong performance in July (+10.2%). The fund’s August performance beat its benchmark (MSCI World Healthcare Equipment & Supplies -4.4%) and the broader healthcare industry index (MSCI World Healthcare Net -4.7%). Despite all the red ink in the stock market last month, 17 of the 49 portfolio positions delivered positive monthly returns. The US health insurance stocks in the portfolio mostly traded higher. Cigna (+4.4%), Molina (+4.4%), Elevance (+3.1%) and Humana (+1.4%) made positive contributions to the fund's performance and only two stocks had a slightly negative effect, Centene (-1.1%) and UnitedHealth (-2.9%). Cigna's second-quarter easily beat consensus expectations with its reported second-quarter profits thanks to a sharp drop in COVID-19 treatment costs and management consequently raised its full-year profit guidance. Molina won a "Managed Medicaid" tender to deliver services to more than one million insured Californians in Los Angeles County, beating Centene.
In the medtech segment, companies with very strong growth rates were the biggest performance drivers. Examples here are Shockwave Medical (+44.1%), TransMedics (+30.7%), Penumbra (+19.5%), Axonics (+13.0%), Insulet (+4.6%) and Dexcom (+1.6%). Shockwave's second-quarter sales beat expectations by more than 12% and the company revised its full-year targets sharply higher. TransMedics beat investor expectations and secured sufficient capital to funds its long-term expansion plans by issuing new shares (3.25 million shares at an issue price of USD 40). Our visit to TransMedics' headquarters in Boston in June 2022 confirmed that its technology represents a paradigm shift in organ preservation for transplantation and creates novel possibilities, including organ optimization and viability assessment before transplantation. We therefore increased our position in the stock through the capital increase.
Large-cap medtechs Sonova (-24.9%), Alcon (-14.7%), Intuitive Surgical (-9.3%), Edwards Lifesciences (-9.1%) and Abbott (-4.3%) had a negative impact on the fund's performance. Sonova issued a profit warning and lowered its sales forecast for the current fiscal year by 2%. The market for hearing aids was said to be recovering more slowly in some countries than the company had expected. Alcon disappointed investors when it reported lower-than-expected sales in Vision Care, a key business segment that includes contact lenses. Shares of Edwards Lifesciences and Abbott were dragged down after Medtronic (-3.6%) reported disappointing quarterly results, which, however, we believe reflects company-specific factors.
The small and mid-cap companies Tandem Diabetes (-29.9%) and Inspire Medical (-7.1%) weighed on performance. Tandem Diabetes reported 2Q sales that were only slightly below analyst expectations. However, its US activities accounted for a significantly smaller share of overall business, which fueled investor fears that Insulet might widen its share of the market with its newly launched OmniPod 5 we assume that the vast majority of Tandem Diabetes existing customers will buy another pump from Tandem Diabetes at renewal. We also expect rival Medtronic to continue to lose market share. Inspire Medical’s second-quarter results beat expectations and management raised its sales guidance for 2022, but investors decided to take profits. Life sciences tools companies Thermo Fisher (-7.6%) and Danaher (-6.1%) were also hit by profit-taking. All performance data is in EUR / B shares.
The outlook for the 2022 investment year in the medtech & services sector is attractive. New cases and hospitalizations in key medtech & services markets (North America, Europe and Japan) plunged. We believe that high population immunity levels will usher in a strong rebound in elective medical procedures during 2022 and 2023. Regardless of when the pandemic and geopolitical situation returns to normal, the sector-specific structural growth factors such as rising life expectancy and high rates of innovation will sustain the medtech & services sector's above-average growth versus the overall economy and power its high rates of profit growth. Higher material and logistics costs are a reality, but those extra costs are likely to be offset by companies’ talented management teams. We additionally expect numerous approvals and market launches of relevant products for diabetes and structural heart disease. Sector valuations are moderate and that offers opportunities, not just for investors; we also expect takeover activity to pick up because the valuation multiples of many young and growing companies have declined so much. The Bellevue Medtech & Services Fund invests in the entire healthcare market except for the drug developers. As a fully adequate healthcare investment vehicle, the fund aims to generate a significantly higher return than a traditional healthcare fund but with a comparable risk profile. The medtech & services sector is one of the stock market's most defensive sectors with sustainable outperformance potential and that is one reason for the success of our investment strategy.
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