Bellevue Emerging Markets Healthcare

Emerging markets posted mixed performance in December. South Korea’s Kospi Index surged 9.3%, while India’s Nifty 50 slipped 0.9% and Brazil’s Ibovespa fell 1.4%. Hong Kong’s Hang Seng Index edged down 0.6%, while China’s CSI 300 Index advanced 3.7%. Overall, the MSCI Emerging Markets Index rose 3.0% over the month. Emerging-market healthcare stocks fell 5.3% in December, underperforming the broader market. Political risk, particularly around the proposed BioSecure Act between the US and China, remains a headwind, with greater clarity on affected companies expected in early 2026. The Bellevue Emerging Markets Healthcare Fund declined 5.9%, trailing its benchmark.

IHH Healthcare (+7.9%), Samsung Biologics (+6.8%), CSPC (+6.6%), Bangkok Dusit (+6.6%) and Dr. Sulaiman Al Habib (+6.3%) were among the fund’s strongest contributors. IHH Healthcare reported better-than-expected results, indicating it has moved past earlier capacity ramp-up delays. Samsung Biologics rebounded following last month’s spin-off of Samsung Episholdings, supported by the acquisition of its first US plant and optimism ahead of its fourth-quarter results. CSPC advanced after highlighting progress across its early-stage pipeline and proposing a listing of its innovation unit, CSPC Innovations. Bangkok Dusit posted solid results despite the Thailand-Cambodia border conflict, with a reaffirmed 2026 outlook boosting confidence. Shares of Dr. Sulaiman Al Habib recovered from last month’s decline as sentiment improved on signs of an earnings turnaround in the hospital sector.

3Sbio (-22.6%), Innovent (-19.0%), BeOne (-12.4%), Sino Biopharm (-12.3%) and Sun Pharma (-6.7%) were the largest detractors from absolute performance. 3Sbio declined after filing a HKD3bn capital raise, compounded by recent clinical setbacks within the PD-1/VEGF class. Innovent shares fell amid intensifying competition in China’s obesity market, as Novo Nordisk and Eli Lilly are expected to introduce discounted pricing. BeOne came under pressure following signals of heightened competitive intensity highlighted at the American Society of Hematology (ASH) conference. Sino Biopharm weakened in line with the broader China healthcare sector ahead of changes to the national drug reimbursement list, anticipated price cuts and emerging political headwinds. Sun Pharma shares fell after an FDA inspection classified one of its manufacturing facilities as “official action indicated”; the plant is a key site for injectable generics supplied to the US market.

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.