Fund Information / Factsheet • Jul 31, 2019
Fund Information / Factsheet
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Trevor M. Polischuk
To invest in the global healthcare sector with the objective of achieving a high level of capital growth. In order to achieve its investment objective, the Company invests worldwide in a diversified portfolio of shares in pharmaceutical and biotechnology companies and related securities in the healthcare sector. It uses gearing, and derivative transactions to enhance returns and mitigate risk. Performance is measured against the MSCI World Health Care Index (net total return, sterling adjusted).
Past performance is not a guide to future performance. The value of investments and the income from them may fall as well as rise and is not guaranteed; an investor may receive back less than the original amount invested.
Net Asset Value per share (total return) +109.2%
Benchmark: MSCI World Health Care Index (net total return; sterling adjusted) +96.5% Source: Morningstar, Benchmark - Bloomberg
In July, the NAV per share was up 2.8%, the share price was up 4.6% and the MSCI World Health Care Index was up 2.8%.
Healthcare stocks were more turbulent and despite moving higher in GBP terms, finished lower in July in USD terms. The main culprit was unexpected news flow on U.S. drug price reforms from the Trump administration. Specifically, the U.S. Department of Health and Human Services (HHS) withdrew the proposed "rebate rule" which could have replaced government purchasing of prescription medicines with rebates to one with discounts, thereby lowering drug list prices and reducing patient co-pays. Healthcare stocks sold off in response to the news. In July our concentrated investment in emerging markets was the largest contributor. These stocks are mostly immune to U.S drug pricing rhetoric but vulnerable to U.S.- China trade war rhetoric – of which there was none of import in the month. As a result, emerging markets contributed over 100 basis points of absolute and excess return in the period. Two additional stocks with outsized gains in the month included the medical device company, Edwards Lifesciences and the specialty pharmaceutical company, Neurocrine Biosciences. Both stocks were higher after better than expected quarterly reports in July.
On the flip side, the share price for Alexion Pharmaceuticals fell in the month despite a solid quarterly earnings report as investor angst over intellectual property around the company's core franchise continues to be an overhang on the stock. Finally, shares in the emerging biotech company, uniQure were weak as investor speculation over M&A waned as regulators have increased their scrutiny of Roche's proposed acquisition of gene-therapy company Spark Therapeutics, which has now unexpectedly being delayed into next year by the U.S. Federal Trade Commission. Looking ahead, second quarter earnings will wane in August and trading volumes are likely to remain low, reflective of typical summer seasonality. President Trump may also opine on drug pricing as a follow up to the failed rebate rule.
Any opinions on individual stocks are those of the Company's Portfolio Manager and no reliance should be given on any such views. Any research in this document has been procured and may have been acted upon by OrbiMed Capital LLC for its own purposes. The results are being made available to you only incidentally. The views expressed herein do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of Frostrow Capital LLP and no assurances are made as to their accuracy.
This document is for information purposes only and does not constitute an offer or invitation to purchase shares in the Company and has not been prepared in connection with any such offer or invitation. Before investing in the Company, or any other investment product, you should satisfy yourself as to its suitability and the risks involved, and you may wish to consult a financial adviser.
Any return you receive depends on future market performance and is uncertain. The Company does not seek any protection from future market performance so you could lose some or all of your investment. For information on the principal risks the Company is exposed to please refer to the Company's Annual Report or Investor Disclosure Document available at www.worldwidewh.com.
Shares in the Company are bought and sold on the London Stock Exchange. The price you pay or receive, like other listed shares, is determined by supply and demand and may be at a discount or premium to the underlying net asset value of the Company. Usually, at any given time, the price you pay for a share will be higher than the price you could sell it.
The Company has increased its exposure to investments via the use of an overdraft facility and derivatives, and this could potentially magnify any losses or gains made by the Company. The Annual Report and Investor Disclosure Document, available on the Company's website, include further details on the use of, and exposure to, derivatives.
Sven H. Borho, CFA, is a founder and Managing Partner of OrbiMed. Sven heads the public equity team and is the portfolio manager for OrbiMed's public equity and hedge funds. He has been a portfolio manager since 1993 and has played an integral role in the growth of OrbiMed's asset management activities. Sven started his career in 1991 when he joined OrbiMed's predecessor firm as a Senior Analyst covering European pharmaceutical firms and biotechnology companies worldwide. He studied business administration at Bayreuth University in Germany and received a M.Sc. (Econs.), Accounting and Finance, from The London School of Economics; he is a citizen of both Germany and Sweden.
Sven H. Borho
Trevor M. Polischuk, Ph.D., is a Partner at OrbiMed focused on the global pharmaceutical industry. Trevor joined OrbiMed in 2003 and became a Partner in 2011. Previously, he worked at Lehman Brothers as a Senior Research Analyst covering the U.S. pharmaceutical industry. Trevor began his career at Warner Lambert as a member of the Global Marketing Planning team within Parke-Davis. Trevor holds a Doctorate in Neuropharmacology & Gross Human Anatomy and an M.B.A. from Queen's University, Canada.
OrbiMed Capital LLC (OrbiMed) is owned by six principals, including Sven Borho who have between them many years' experience of investing in the pharmaceutical, biotechnology and healthcare sectors. The U.S. based company has over 90 investment professionals who carry out extensive research, involving company visits and evaluating the commercial and scientific prospects for individual drugs. OrbiMed is registered as an investment adviser under the U.S. Securities and Exchange Commission (SEC). SEC registration does not imply a certain level of skill or training.
The Company offers a superior UK-listed opportunity for capital appreciation through a diversified portfolio of worldwide pharmaceutical, biotechnology, healthcare equipment, healthcare technology and healthcare services companies. The Portfolio Manager seeks to reduce risk through extensive fundamental research, worldwide exposure, position limits, and balanced market capitalisations. The Company's investment policy allows gearing, through borrowing, of up to 20% of net assets and a net exposure to derivative investments (excluding swaps) of up to 5% of the portfolio. Equity swaps may also be used, counterparty exposure here is limited to 12% of the portfolio at the time of acquisition. Unquoted securities will not exceed 10% of the portfolio at the time of acquisition.
The Directors have adopted an active discount management policy to establish and support an improved rating in the Company's shares through the use of share buybacks, with a view to limiting the discount to the ex income NAV per share at which the shares trade to no more than 6%. Shares bought back may be held in treasury for reissue at later dates at not more than the discount at which they were purchased, and in any event at a discount no greater than 5% to the prevailing cum income net asset value per share. Any shares left in treasury are cancelled around the time of the AGM. In order to stop the share price trading at a significant premium to the NAV per share, the Company has the ability to issue new shares at a 0.7% premium to the cum income NAV per share.
| Name | Region | Total |
|---|---|---|
| Takeda Pharmaceutical | Japan | 8.3 |
| Boston Scientific | North America | 6.5 |
| Merck & Co | North America | 4.9 |
| Alexion Pharmaceuticals | North America | 4.4 |
| Novo Nordisk | Europe | 3.4 |
| Novartis | Europe | 3.3 |
| Neurocrine Biosciences | North America | 3.2 |
| Edwards Lifesciences | North America | 3.0 |
| Wright Medical | North America | 2.9 |
| Abbott Laboratories | North America | 2.8 |
| Total | 42.7 |
| Pharmaceutical | 30.5 | North America | 65.3 | Equities | 90.8 |
|---|---|---|---|---|---|
| Biotechnology | 28.1 | Emerging Markets | 14.9 | Equity Swaps | 7.0 |
| Healthcare Equipment/Supplies | 20.5 | Asia | 10.0 | Unquoteds | 1.6 |
| Healthcare Providers/Services | 11.6 | Europe | 9.8 | Options | 0.6 |
| Life Sciences/Tools & Services | 5.5 | Total | 100.0 | Total | 100.0 |
| Emerging Markets Baskets | 2.2 | ||||
| Fixed & Variable Interest | 1.0 | ||||
| Health Care Technology | 0.6 | ||||
| Total | 100.0 | ||||
*Calculation based on economic exposure and expressed as a % of the total economic exposure. This includes all derivatives as an economically equivalent position in the underlying holding.
**Geographical analysis based on country of primary listing.
***Unquoted securities will not exceed 10% of the portfolio at the time of acquisition.
Source: All portfolio information sourced from Frostrow Capital LLP.
| Percentage Growth | 2014 | 2015 | 2016 | 2017 | 2018 | YTD |
|---|---|---|---|---|---|---|
| NAV | 38.8 | 19.1 | 5.2 | 16.5 | -3.8 | 19.0 |
| Share Price | 39.6 | 13.9 | 10.1 | 20.7 | -5.0 | 19.5 |
| Benchmark | 25.6 | 12.7 | 11.2 | 9.4 | 8.8 | 13.3 |
| Percentage Growth 12 Month Return |
Jul 14- Jul 15 |
Jul 15- Jul 16 |
Jul 16- Jul 17 |
Jul 17- Jul 18 |
Jul 18- Jul 19 |
|---|---|---|---|---|---|
| NAV | 51.4 | 8.0 | 10.8 | 12.7 | 2.4 |
| Share Price | 54.4 | 5.7 | 20.9 | 11.5 | 3.4 |
| Benchmark | 33.0 | 13.0 | 5.4 | 11.8 | 11.0 |
Past performance is not a guide to future performance. The value of investments and the income from them may fall as well as rise and is not guaranteed. An investor may receive back less than the original amount invested.
Source: NAV (total return; fully diluted) & share price (total return) – Morningstar. Benchmark - Bloomberg.
Worldwide Healthcare Trust PLC (the Company) is a public limited company whose shares are premium listed on the London Stock Exchange (LSE) and is registered with HMRC as an investment trust.
The Company has an indeterminate life, although shareholders consider and vote on the continuation of the Company every five years (the next such vote will be held in 2024).
This financial promotion is issued by Frostrow Capital LLP which is authorised and regulated by the Financial Conduct Authority ("FCA").
The MSCI information (relating to the Benchmark) may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an "as is" basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the "MSCI Parties") expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation lost profits) or any other damages. (www.msci.com).
| Fast Facts | as at 31 July 2019 | ||||
|---|---|---|---|---|---|
| AIC Sector | Biotechnology & Healthcare | ||||
| Launch Date & appointment of Portfolio Manager |
April 1995 | ||||
| Annual Management Fee (payable by the Company): 0.65% of net assets plus 0.30% of market cap. up to £150m; in the range £150m to £500m 0.2%; in the range £500m to £1bn 0.15%; in the range £1bn to £1.5bn 0.125%; over £1.5bn 0.075% plus £57,500 Performance Fee See Annual Report for |
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| details | |||||
| Ongoing charges* | 0.9% | ||||
| Continuation Vote | th 2024 AGM and every 5 AGM thereafter |
||||
| Year / Half Year | 31 March / 30 September |
Capital Structure 53,170,278 shares *Calculated at the financial year end, includes management fees and all other operating expenses, and excludes performance fees.
| Number of Holdings | 67 | ||
|---|---|---|---|
| Net Assets (£m) | 1,484.5 | ||
| Market Capitalisation (£m) | 1,507.4 | ||
| Dividends | Provisional payment dates: January & July |
||
| Indicative Yield | 0.9% | ||
| Gearing | 0.9% | ||
| Leverage** | Gross 110.9% Commitment 108.6% |
||
| Share Price (p) | 2835.00 | ||
| NAV(p) (cum income) | 2791.97 | ||
| Premium / (Discount) | 1.5% | ||
| ** The Board has set the maximum leverage limit for both the Gross and the Commitment basis at 140% of the Company's Net Asset Value. |
| Sedol | 0338530 | ||||
|---|---|---|---|---|---|
| ISIN | GB0003385308 | ||||
| Legal Entity Identifier (LEI) 5493003YBCY4W1IMJU04 |
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| Global Intermediary Identification Number | |||||
| (GIIN) | FIZWRN.99999.SL.826 | ||||
| Bloomberg | WWH LN | ||||
| EPIC | WWH |
Frostrow Capital LLP 25 Southampton Buildings, London, WC2A 1AL Tel.: 0203 0084910 Fax: 0203 0438889 Website: www.frostrow.com Email: [email protected]
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