Bellevue Medtech & Services (CH)

In April, volatility in global equity markets declined following the agreed ceasefire. At the same time, stronger-than-expected consumer confidence, a more robust US labor market, and lower-than-expected core inflation supported the broad recovery in equity markets.

The broad equity market gained 7.0% in the month under review. In contrast, the healthcare sector declined by 2.6%, with medtech, pharma, and biopharma in particular weighing on performance. The Bellevue Medtech & Services Fund rose by 1.5% and thus outperformed its benchmark, which increased by 0.7%. While medtech companies detracted 3.3% from performance, healthcare services providers made a positive contribution of 4.8%.

Veeva Systems (-13.3%), HCA Healthcare (-10.3%), and McKesson (-8.0%) weighed on performance. Veeva came under pressure as the company expects weaker momentum in cloud software order intake for R&D in the biopharma industry. However, new clinical cloud applications provide reasons for confidence. Q1 volumes at hospital operator HCA were affected by one-off factors such as a mild flu season and winter storms. The unchanged full-year guidance and visible volume recovery in February and March leave us confident for 2026.

Health insurers such as Centene (+60.2%), UnitedHealth (+33.7%), Elevance (+25.6%), CVS Health (+14.2%), and Cigna (+6.4%) made positive contributions to performance. Centene, UnitedHealth, Elevance, and Cigna reported their first-quarter results in April, all of which came in above expectations. Guidance for 2026 was only raised cautiously. The overall tone of management teams was constructive but not euphoric: Positive trends in cost development and customer retention are tempered by the fact that available data so far mainly reflects January and February, which were influenced by winter storms and a mild flu season. The second quarter will therefore be a key test of whether the recovery in the health insurance sector is sustainable.

Performance in the medtech sector was weak overall in April. Positive contributions came from Glaukos (+30.3%), Hoya (+8.7%), and Edwards Lifesciences (+1.8%). However, these were offset by significant share price declines among large-cap companies such as Abbott (-13.1%), Boston Scientific (-10.3%), EssilorLuxottica (-9.3%), Medtronic (-8.7%), Stryker (-6.3%), and Intuitive Surgical (-3.0%).

Immediately after reporting better-than-expected first-quarter results, several stocks initially reacted positively, including Boston Scientific (+9%), Intuitive Surgical (+8%), and Edwards Lifesciences (+6%). However, these gains were not sustained over the remainder of the month as valuation multiples declined to historically low levels. Glaukos exceeded expectations with strong Q1 2026 results and raised its full-year guidance after just three months. Hoya continued to benefit from ongoing investment programs by technology companies in data centers and storage capacity.
Life science tools companies Danaher (-7.8%) and Thermo Fisher (-4.8%) also weighed on performance. Both companies failed to exceed the high expectations of investors.

All performance data in CHF / AA shares.

In the healthcare services segment, we see considerable value creation potential for hospitals and US health insurers. Hospitals are expected to benefit from persistently high treatment volumes and only moderately rising personnel costs. For health insurers, we expect margin recovery in 2026, particularly in the Medicare Advantage segment. Continued high interest rates could provide additional support to earnings.

Based on Q1 reports from medtech companies and our discussions with numerous management teams in recent weeks, we expect robust growth in procedure volumes in 2026. Operating leverage from solid procedure volumes, a weaker US dollar, and the annualization of newly introduced tariffs should support stable earnings growth.

The approval and launch of key new products are expected to further support revenue growth in the medtech sector and stabilize valuations. Examples include Abbott’s Volt PFA catheter, Boston Scientific’s Farapulse PFA and Watchman FLX Pro, Intuitive Surgical’s da Vinci 5 robotic system, Medtronic’s Hugo system, Johnson & Johnson’s Ottava system, and Medtronic’s Symplicity Spyral catheter. Numerous clinical data readouts and new reimbursement frameworks should not only strengthen investor confidence but also support revenue growth over the medium term.