Fund Information / Factsheet • Jul 20, 2020
Fund Information / Factsheet
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Trevor M. Polischuk Sven H. Borho
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.
Benchmark: MSCI World Health Care Index (net total return; sterling adjusted) +76.2% Source: Morningstar, Benchmark - Bloomberg
In June, the NAV per share was up 1.0%, the share price was up 2.0% and the MSCI World Health Care Index was down 1.8%.
Market volatility increased on investor concerns over COVID-19 infections spiking in portions of the United States, spooking the equity markets. Healthcare stocks lost some momentum in June and the sector appeared to suffer from some profit taking after the strong rebound observed in April and May. Despite the volatility, the Company was able to produce positive absolute and relative returns in the month. This was largely due to our continued strategic investments in Emerging Markets stocks that recorded very strong returns in June, particularly in China. For example, our portfolio company Burning Rock Biotech, in which we participated in an earlier crossover round, successfully IPO'd on the NASDAQ exchange in the period. The stock nearly doubled within two weeks of the initial public offering before some modest profit taking occurred before month end. We continue to actively participate in a number of Hong Kong IPO opportunities as "cornerstone" investors. Additional notable contributions came from other Emerging Markets investments, such as Shanghai Kindly Medical, CanSino Biologics, Kangii Medical, Pharmanon Beijing, and Akeso, all of which contributed +25 basis points or more in June.
Detractors of import were diverse in nature. For example, the share price for Biogen was weak in June after a district court invalidated the patent for one of the company's key commercial assets, Tecfidera (a treatment for multiple sclerosis). Shares in the gene therapy company, uniQure, sold off after the company announced an out licensing for its lead pipeline asset, deflating investor takeout hopes. Finally, continued investor and analyst debate around the business model and accounting for internet health insurance provider, eHealth, pushed the share price lower.
Looking ahead, we expect continued COVID-19 pandemic related volatility for healthcare stocks and the broad market alike. Additionally, political rhetoric may rise in the second half of the calendar year, as we approach the Democratic National Convention in August and from President Trump himself as his popularity slides in national polls. Whilst healthcare remains in the headlines during the pandemic, our strategy will continue to primarily focus on positive industry fundamentals and the secular outlook, remaining true to our core strategy.
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.
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 80 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, 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.
Worldwide Healthcare Trust PLC conducts its affairs so that its shares can be recommended by independent financial advisers ("IFAs") to retail private investors. The shares are excluded from the Financial Conduct Authority's ("FCA's") restrictions which apply to non-mainstream investment products because they are shares in a UK-listed investment trust.
| Name | Region | Total |
|---|---|---|
| Alexion Pharmaceuticals | North America | 5.0 |
| Merck & Co | North America | 4.7 |
| Takeda Pharmaceutical | Japan | 4.3 |
| Bristol-Myers Squibb | North America | 4.2 |
| Novartis | Europe | 3.8 |
| Boston Scientific | North America | 3.8 |
| Biogen | North America | 3.8 |
| Vertex Pharmaceuticals | North America | 3.5 |
| Horizon Therapeutics | North America | 3.1 |
| Mirati Therapeutics | North America | 3.0 |
| Total | 39.2 |
| Total | 100.0 | ||||
|---|---|---|---|---|---|
| Variable Interest | 0.4 | ||||
| Life Sciences/Tools & Services | 4.9 | Total | 100.0 | Total | 100.0 |
| Healthcare Equipment/Supplies | 13.1 | Asia | 4.3 | Unquoteds | 0.4 |
| Healthcare Providers/Services | 13.3 | Europe | 12.6 | Variable Interest | 0.4 |
| Pharmaceutical | 29.0 | Emerging Markets | 20.5 | Equity Swaps | 4.6 |
| Biotechnology | 39.3 | North America | 62.6 | Equities | 94.6 |
*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. Analysis excludes cash and cash equivalents, including liquidity funds.
| Percentage Growth | 2015 | 2016 | 2017 | 2018 | 2019 | YTD |
|---|---|---|---|---|---|---|
| NAV | 19.1 | 5.2 | 16.5 | -3.8 | 31.9 | 17.3 |
| Share Price | 13.9 | 10.1 | 20.7 | -5.0 | 32.3 | 16.0 |
| Benchmark | 12.7 | 11.2 | 9.4 | 8.8 | 18.4 | 8.7 |
| Percentage Growth 12 Month Return |
Jun15- Jun 16 |
Jun 16- Jun 17 |
Jun 17- Jun 18 |
Jun 18- Jun 19 |
Jun 19- Jun 20 |
|---|---|---|---|---|---|
| NAV | 3.7 | 20.7 | 8.1 | 3.8 | 33.6 |
| Share Price | -0.4 | 33.1 | 8.0 | 3.1 | 34.2 |
| Benchmark | 13.1 | 12.0 | 3.4 | 15.2 | 16.8 |
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).
| AIC Sector | Biotechnology & Healthcare | |||
|---|---|---|---|---|
| Launch Date & appointment of April 1995 Portfolio Manager |
||||
| 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 | details | See Annual Report for | ||
| Ongoing charges* | 0.9% |
| Continuation Vote | th 2024 AGM and every 5 |
|---|---|
| AGM thereafter | |
| Year / Half Year | 31 March / |
| 30 September | |
| Capital Structure | 57,163,778 shares |
| *Calculated at the financial year end, includes management fees |
and all other operating expenses, and excludes performance fees.
| Number of Holdings | 73 | |
|---|---|---|
| Net Assets (£m) | 2,058.0 | |
| Market Capitalisation (£m) | 2,063.6 | |
| Dividends | Provisional payment dates: January & July |
|
| Indicative Yield | 0.7% | |
| Gearing | 0.0% | |
| Leverage** | Gross 105.2% Commitment 97.2% |
|
| Share Price (p) | 3610.00 | |
| NAV(p) (cum income) | 3600.17 | |
| Premium / (Discount) | 0.3% | |
| ** 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 |
|||
| (GIIN) | Global Intermediary Identification Number 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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