U Shares

Facts & Key figures

Investment Focus

The Bellevue Diversified Healthcare fund aims to achieve long-term capital growth, is actively managed and invests worldwide in companies with innovative business models that are active in all subsectors of the healthcare sector, such as biotechnology, medical technology, generics, pharma and healthcare services, and engaged in the research, development, production and sale of products and services. Experienced sector specialists manage the portfolio with a focus on leveraging the positive characteristics of the healthcare sector, especially the favorable correlation profiles between the various subsectors. Stock selection is bottom-up. The Bellevue Diversified Healthcare fund seeks to outperform the MSCI World Health Care Index. The fund’s investment process also takes ESG factors into consideration.
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Investment suitability & Risk

SRI

Low risk

High risk

The Fund’s investment objective is to generate attractive and competitive long-term capital growth. It is particularly suited to investors with an investment horizon of at least 5 years. The Fund is exposed to the risks typical of equity investments.

General Information

Investment Manager	Bellevue Asset Management AG
Custodian	CACEIS BANK, LUXEMBOURG BRANCH
Fund Administrator	CACEIS BANK, LUXEMBOURG BRANCH
Auditor	PriceWaterhouseCoopers
Launch date	31.03.2022
Year end closing	30. Jun
NAV Calculation	Daily "Forward Pricing"
Cut of time	15:00 CET
Management Fee	0.80%
Subscription Fee (max.)	5.00%
ISIN number	LU2441707739
Valor number	116534201
Bloomberg	BDHCUCH LX
WKN	A3DEAV

Legal Information

Legal form	Luxembourg UCITS V SICAV
SFDR category	Article 8

Key data (31.10.2024, base currency USD)

Beta	0.98
Volatility	9.88
Tracking error	3.12
Active share	24.85
Correlation	0.95
Sharpe ratio	1.64
Information ratio	0.28
Jensen's alpha	1.31
No. of positions	70

Portfolio

Top 10 positions

UnitedHealth Group

Eli Lilly

Johnson & Johnson

AbbVie

Novo Nordisk

Intuitive Surgical

Thermo Fisher

Merck & Co

Novartis

Boston Scientific

8.6%

8.1%

5.7%

4.6%

4.5%

3.7%

3.3%

3.1%

3.0%

Market capitalization

1 - 2 bn

2 - 5 bn

5 - 15 bn

15 - 20 bn

> 20 bn

Others

0.3%

2.0%

6.7%

1.5%

88.8%

0.8%

Geographic breakdown

United States

Switzerland

Denmark

France

Great Britain

Japan

Belgium

Italy

Sweden

Spain

Australia

Finland

Cash

71.9%

9.0%

5.5%

3.5%

2.9%

2.8%

1.5%

0.9%

0.5%

0.3%

0.7%

Breakdown by sector

Pharma

Medtech

Services

Biotechnology

Life Sciences Tools

Generics

Cash

41.8%

23.8%

15.5%

11.5%

4.5%

2.2%

0.7%

Benefits & Risks

Benefits

Profit from the worldwide growth of the healthcare sector, which has clearly outpaced the growth of global GDP during the past ten years.
Take advantage of the positive characteristics of the healthcare sector and generate alpha through a bottom-up selection process and factor allocation strategies.
Strategic overweighting of the “structural growth” factor and underweighting of blue-chip pharmaceutical stocks.
Low earnings risk – above-average earnings growth, even in crisis years, leading to stable portfolio components.
Bellevue – healthcare pioneer since 1993 and today one of the biggest independent investors in the sector in Europe.

Risks

The fund actively invests in equities. Equities are subject to strong price fluctuations and so are also exposed to the risk of price losses.
The fund may invest a proportion of its assets in financial instruments that might under certain circumstances have a relatively low level of liquidity, which can in turn affect the fund’s liquidity.
The fund invests in foreign currencies, which means a corresponding degree of currency risk against the reference currency.
Investing in emerging markets entails the additional risk of political and social instability.
The fund may engage in derivatives transactions. The increased opportunities gained come with an increased risk of losses.

Review / Outlook

MSCI World Healthcare underperformed MSCI World in October 2024 by 284 bps (MSCI World Healthcare -4.8% vs. MSCI World -2.0%). A rising 10-year US treasury yield, mixed company Q3 results, and uncertainty into the US election saw global equities pull back in October. Bellevue Diversified Healthcare (Lux) Fund (I-shares: -4.0%, in USD) outperformed (by 82 bps) its healthcare index benchmark.

Along with disappointing price action, we note that the forward P/E relative for MSCI World Healthcare versus MSCI World moved deeper into discounted territory in October. We see two drivers for this de-rating, healthcare was pulled into the US election volatility (mainly in healthcare services), and the mega-cap obesity names faced emerging (albeit early) competition risk.

Within the MSCI World Healthcare Index, healthcare tech (+0.5%) was the best performing subsector in the month. This was followed by biotech (-1.0%), medtech (-2.9%), and pharmaceuticals (-5.0%). Life science tools was the clear laggard with a performance of -9.9%.

From a geographical point of view, Asian healthcare (all country, -3.6%) performed best, supported by a less weak performance for Japanese equities relative to global healthcare. This was followed by US Healthcare (-4.6%), and European Healthcare (-6.4%). The laggard region in October was Emerging Market Healthcare (all country, -7.1%), as the Chinese equity market retracted following a strong prior month. From a market capitalization perspective, each group performed poorly. The large-caps grouping (USD 60-200 bn; -4.6%) performed least poorly, followed by the mega-cap grouping (>USD 200 bn; -4.7%), and mid-caps (USD 2-60 bn market capitalization; +5.5%).

Within the fund, strong absolute performances were reported during the month from Intra-cellular therapeutics (+15.8%; strong Q3 results), Procept Biorobotics (+12.3%; strong Q3 results), and Penumbra (+11.3%; strong Q3 results). On the other hand, negative absolute performances were seen for CareDx (-29.1%; lack of guidance give at CMD day), Elevance (-22.0%; weak Q3 results / guidance downgrade), and Regeneron (-20.3%; launch of Eylea biosimilar).

While performance broadened across subsector, style, and marketcapitalization within healthcare in March, we still favour high-quality structural growth names in what is a late-cycle stage of the economic cycle.

Parabolic raises in some share prices are creating risks, but our diversified approach should help mitigate these. While maintaining an overweight in structural growth, we have recently broadened our style exposure given the uncertain macro outlook.

In terms of thematics, we still see obesity as a key long-term theme within healthcare and maintain an overweight exposure. When looking at more underappreciated new modalities, we are looking forward to new data sets investigating cell therapy in auto-immune diseases.

Documents

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ESG

Lead Portfolio Manager
Terence McManus
Dr Terence McManus joined Bellevue Asset Management in 2022 and is lead portfolio manager of the funds Bellevue Diversified Healthcare, Bellevue Healthcare Strategy/Sustainable and portfolio manager of the Bellevue Obesity Solutions fund. Prior to this, he has 12 years of experience within healthcare-specific investing and analysis at Jefferies Investment Bank, Credit Suisse, Julius Baer and most recently at J. Safra Sarasin where he managed a sustainable health fund. Terence started his career as a scientist focused on drug discovery. He holds a PhD in Neuroscience from the University of Southampton, UK.
Portfolio Manager
Lukas Leu
Dr Lukas Leu has been at Bellevue Asset Management since 2021. He is lead portfolio manager of the Bellevue Obesity Solutions fund and portfolio manager of the Bellevue Healthcare Diversified fund. He holds a PhD in biochemistry from the Swiss Federal Institute of Technology in Zurich. He previously worked as a research assistant at his alma mater and as an equity research analyst in the healthcare sector at Julius Baer.