Fund Information / Factsheet • Mar 10, 2023
Fund Information / Factsheet
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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.
Share Price (total return) +31.9%
Benchmark: MSCI World Health Care Index (net total return; sterling adjusted) +74.9%
Source: Morningstar, Index - Bloomberg.
| Ten Largest Holdings as at 28 February 2023 |
||||||
|---|---|---|---|---|---|---|
| Name | Region | Sector | Total | |||
| AstraZeneca | Europe | Pharmaceuticals | 5.9 | |||
| UnitedHealth | North America | Health Care Providers & Services |
5.0 | |||
| Bristol-Myers Squibb | North America | Pharmaceuticals | 5.0 | |||
| Healthcare M&A Target Swap | North America | Swap Baskets | 4.5 | |||
| Boston Scientific | North America | Health Care Equipment & Supplies |
4.4 | |||
| Humana | North America | Health Care Providers & Services |
4.4 | |||
| Roche | Europe | Pharmaceuticals | 4.0 | |||
| Intuitive Surgical | North America | Health Care Equipment & Supplies |
3.8 | |||
| Sanofi | Europe | Pharmaceuticals | 3.5 | |||
| Seagen | North America | Biotechnology | 3.4 | |||
| Total | 43.9 |
Portfolio Manager Trevor Polischuk
Portfolio Manager Sven H. Borho
| Fast Facts | As at 28 February 2023 | |||
|---|---|---|---|---|
| AIC Sector | Biotechnology & Healthcare | |||
| Launch Date & appointment of Portfolio Manager |
April 1995 | |||
| over £1.5bn 0.075% plus £57,500. | 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%; |
|||
| Performance Fee | See Annual Report for details |
|||
| Ongoing Charges Ratio (OCR)* |
0.9% | |||
| Continuation Vote | 2024 AGM and every th AGM thereafter 5 |
|||
| Year / Half Year | 31 March / 30 September |
|||
| Capital Structure | 63,372,329 shares# 1,686,449 (treasury) |
| Number of Holdings | 66 |
|---|---|
| Net Assets (£m) | 2,172.4 |
| Market Capitalisation (£m) | 2,002.6 |
| Dividends | Provisional payment dates: January & July |
| Indicative Yield | 0.8% |
| Gearing | 5.0% |
| Leverage** | Gross 118.9% Commitment 114.9% |
| Share Price (p) | 3160.00 |
| NAV per share (p) (cum income) |
3427.94 |
| (Discount) / Premium | (7.8%) |
| Portfolio Turnover p.a. | 62.4% |
| Active Share*** | 68.4% |
| Pharmaceutical | 29.6 | North America | 66.3 | Listed Equities | 86.0 |
|---|---|---|---|---|---|
| Biotechnology | 19.7 | Europe | 17.1 | Equity Swaps | 8.0 |
| Healthcare Providers / Services |
19.6 | China / Hong Kong | 9.4 | Unquoteds | 6.0 |
| Healthcare Equipment / Supplies |
17.1 | Japan | 5.3 | Total | 100.0 |
| Life Sciences Tools & Services |
8.6 | India | 1.9 | ||
| Swap Baskets | 5.4 | Total | 100.0 | ||
| 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. Analysis excludes cash and cash equivalents, including liquidity funds.
| Percentage Growth 12 Month Return |
2018 | 2019 | 2020 | 2021 | 2022 | YTD |
|---|---|---|---|---|---|---|
| NAV | -3.8 | 31.9 | 20.0 | -0.4 | -3.3 | -1.8 |
| Share Price | -5.0 | 32.3 | 19.9 | -2.6 | -9.8 | -2.0 |
| Index | 8.8 | 18.4 | 10.3 | 20.8 | 5.8 | -4.7 |
| Percentage Growth 12 Month Return |
Feb 18- Feb 19 |
Feb 19- Feb 20 |
Feb 20- Feb 21 |
Feb 21- Feb 22 |
Feb 22- Feb 23 |
|---|---|---|---|---|---|
| NAV | 8.8 | 15.2 | 22.2 | -9.1 | 4.2 |
| Share Price | 8.4 | 9.5 | 29.0 | -15.2 | 1.7 |
| Index | 13.2 | 9.7 | 11.2 | 17.0 | 8.2 |
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.
*Calculated at the financial year end, includes management fees and all other operating expenses, and excludes performance fees.
** 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.
*** Active Share is expressed as a percentage and shows the extent to which a fund's holdings and their weightings differ from those of the fund's benchmark index. A fund that closely tracks its index might have a low Active Share of less than 20% and be considered passive, while a fund with an Active Share of 60% or higher is generally considered to be actively managed.
# excludes shares held in treasury
The healthcare sector is global and accessing this market as a UK investor can be difficult. The Company offers an opportunity to gain exposure to pharmaceutical, biotechnology and related companies in the healthcare sector on a global scale. The Company invests in large companies with market capitalisations of over U.S.\$10bn, smaller companies below that size, as well as unquoted companies. The portfolio ranges from large multinational pharmaceutical companies with multiple products to unquoted emerging biotechnology companies. 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.
In February, the NAV per share total return was -1.3%, the share price total return was +0.8% and the MSCI World Health Care Index was -2.3%, on a net total return, sterling adjusted basis.
Investors continued to scrutinize (and debate) global economic data in February, attempting to ascertain a putative global recession or perhaps a softer landing. Global equities declined in the month after the strong advance seen in January whilst stocks rose in the UK. However, healthcare stocks continued to underperform the broader markets as investors continue to eschew defense for offense thus far in 2023.
Whilst this climate has created some headwinds for healthcare stocks, relative performance to the Benchmark was positive this month. The M&A theme in biotechnology continued in earnest in February, as reports circulated that Pfizer were pursuing Seagen, the Washington state-based oncology biotech company, in a potential \$40 billion plus acquisition. With the stock rising higher as a result, Seagen was the top contributor in the month.
Additional contribution came from non-therapeutics sub-sectors including Life Science Tools, Healthcare Services, and Medical Technology. Notable alpha was also generated across Pharmaceuticals, including an outsized contribution from AstraZeneca after the company reported a better than expected quarterly financial result and provided guidance for 2023 that was above consensus.
The key detractor of import was our exposure to Emerging Markets, China in particular. After a three-month rally fueled by China's re-opening, investors took profits in February as geopolitical tensions with the U.S. increased materially. The Hang Seng Healthcare Index dropped over 10% in local currency (nearly 9% in sterling) as result and our holdings suffered a similar fate.
Looking ahead, we continue to see evidence of M&A activity in the healthcare space and we expect this theme to continue throughout 2023. With drug pricing reform in the U.S. complete and entering a year with no U.S. federal election of note, our outlook for 2023 remains the same. That is, with incredible innovation driving important catalysts, we anticipate parts of the sector to re-rate given the undemanding valuations that currently accompany them.
The Directors have adopted an active discount management policy through the use of share buybacks, with a view to limiting the discount to the cum income NAV per share at which the shares trade to no more than 6%. It should be noted, however, that it remains possible for the share price discount to the cum income NAV per share to be greater than 6% on any day. Shares bought back may be held in treasury for reissue at later dates at a premium 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 help prevent 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.
Frostrow Capital LLP 25 Southampton Buildings London, WC2A 1AL
Tel.: 0203 008 4910 Fax: 0203 043 8889
Website: www.frostrow.com Email: [email protected]
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.
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).
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