Worldwide Healthcare Trust (LON:WWH) is managed by Sven Borho and Trevor Polischuk of specialist healthcare investor OrbiMed. The managers are positive on the outlook for healthcare stocks in 2019, following a volatile period for global equities so far in 2018. They see reduced political pressure on the sector following the US mid-term elections and believe there will be more of a focus on company fundamentals. The managers cite a series of novel therapeutic products under development, which could meaningfully bolster the revenues and earnings of companies that can successfully bring these drugs to market. In addition, they suggest that an increase in mergers and acquisitions could also focus investor attention on the healthcare sector’s potential.
Investment strategy: Diligent, bottom-up research
The managers and the team at OrbiMed undertake diligent fundamental research, with inputs including analysis of clinical events, regulatory developments and new drug launches, along with meeting company managements. The resulting portfolio of c 80 holdings is selected from a universe of c 1,000 stocks and is diversified by geography, industry subsector and market capitalisation. The US dominates the global healthcare industry and represents c 75% of WWH’s portfolio. Gearing is regularly employed in the trust (up to 20% of NAV is permitted); at end-October 2018, net gearing was 10.5%.
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