Fund Information / Factsheet • Feb 15, 2024
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.
+65.7%
Source: Morningstar, Index - Bloomberg.
| Ten Largest Holdings as at 31 January 2024 | |||||
|---|---|---|---|---|---|
| Name | Region | Sector | Total | ||
| Eli Lilly | North America | Pharmaceuticals | 7.4 | ||
| Healthcare M&A Target Swap |
North America | Swap Baskets | 7.3 | ||
| Boston Scientific | North America | Health Care Equipment & Supplies | 6.0 | ||
| AstraZeneca | Europe | Pharmaceuticals | 5.5 | ||
| Intuitive Surgical | North America | Health Care Equipment & Supplies | 5.4 | ||
| Novo Nordisk | Europe | Pharmaceuticals | 5.3 | ||
| Biogen | North America | Biotechnology | 4.3 | ||
| Merck | North America | Pharmaceuticals | 3.8 | ||
| Daiichi Sankyo | Japan | Pharmaceuticals | 3.4 | ||
| Tenet Healthcare | North America | Health Care Providers & Services | 2.9 | ||
| Total | 51.3 |
Portfolio Manager Trevor Polischuk
Portfolio Manager Sven H. Borho
| Fast Facts | As at 31 January 2024 | |||
|---|---|---|---|---|
| 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. |
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| Performance Fee | See Annual Report for details |
|||
| Ongoing Charges Ratio (OCR)* |
0.8% | |||
| Continuation Vote | 2024 AGM and every th AGM thereafter 5 |
|||
| Year / Half Year | 31 March / 30 September |
# excludes shares held in treasury
| 59 Number of Holdings |
||||
|---|---|---|---|---|
| Net Assets (£m) | 1,980.8 | |||
| Market Capitalisation (£m) | 1,763.1 | |||
| Dividends | Provisional payment dates: January & July |
|||
| Indicative Yield | 1.0% | |||
| Gearing | 0.0% | |||
| Leverage** | Gross 110.6% Commitment 108.3% |
|||
| Share Price (p) | 315.50 | |||
| NAV per share (p) (cum income) |
354.46 | |||
| (Discount) / Premium | (11.0%) | |||
| Portfolio Turnover p.a. | 61.6% | |||
| Active Share*** | 62.3% |
| Pharmaceutical | 32.0 | North America | 69.2 | Listed Equities | 85.1 |
|---|---|---|---|---|---|
| Biotechnology | 20.3 | Europe | 16.3 | Equity Swaps | 8.7 |
| Healthcare Equipment / Supplies |
17.3 | China / Hong Kong | 7.7 | Unquoteds | 6.2 |
| Healthcare Providers / Services |
13.9 | Japan | 5.8 | Total | 100.0 |
| Life Sciences Tools & Services |
8.9 | India | 1.0 | ||
| Swap Baskets | 7.6 | 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 |
2019 | 2020 | 2021 | 2022 | 2023 | YTD |
|---|---|---|---|---|---|---|
| NAV | 31.9 | 20.0 | -0.4 | -3.3 | 0.4 | 2.0 |
| Share Price | 32.3 | 19.9 | -2.6 | -9.8 | -2.6 | 1.4 |
| Index | 18.4 | 10.3 | 20.8 | 5.8 | -1.6 | 3.0 |
| Percentage Growth 12 Month Return |
Jan 19- Jan 20 |
Jan 20- Jan 21 |
Jan 21- Jan 22 |
Jan 22- Jan 23 |
Jan 23- Jan 24 |
|---|---|---|---|---|---|
| NAV | 18.4 | 23.3 | -9.7 | 5.7 | 3.0 |
| Share Price | 18.4 | 23.5 | -15.5 | 1.2 | 1.6 |
| Index | 14.9 | 12.0 | 12.0 | 10.6 | 3.9 |
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.
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 January, the NAV per share total return was +2.0%, the share price total return was +1.4% and the MSCI World Health Care Index was +3.0%, on a net total return, sterling adjusted basis.
Global equity markets started 2024 the way they ended 2023, moving higher – despite some early weakness in the month. Of course, investors continued to debate potential interest rate cuts in the near term, and whilst no consensus has yet to be determined, markets were able to establish all-time highs intra-month in January. One clear exception to the broad market exuberance was China, as investors there have grown increasingly jittery about the state of the economy.
Performance of the Company was fueled by a positive contribution by almost allsubsectors in the month, most notably Large Cap Pharmaceuticals and Medical Technology, plus Emerging Biotechnology. In addition to favorable market conditions, 4Q earnings reports significantly and positively impacted returns. In Pharmaceuticals, investors liked what they heard regarding the "Magnificent Two" as both Eli Lilly and Novo Nordisk reported quarterly results and guidance that was in-line or better than expected (including top line growth of +20% or better in 2024). Similar with Merck, who reported strong financials ahead of a year of multiple new product launches. In Medical Technology, Intuitive Surgical confirmed the imminent launch of their next generation surgical robot much to investor excitement. A formal approval may come in March. Finally of note, Boston Scientific also reported a solid 4Q with strong organic growth and guidance ahead of expectations.
The largest detractor in January was Emerging Markets, in particular Chinese healthcare stocks. In addition to ongoing concerns about China's economy, headlines emerged in late January about proposed legislation coming from the U.S. – the Biosecure Act – that would ban federally funded companies from using foreign companies and their affiliated subsidiaries in China, primarily on the grounds of security concerns around genetic data collection and the potential political implications therein. The largest detractor in the month, WuXi AppTec, was specifically named in the bill. Overall, China detracted over 1.25% from performance in the month.
January did not dissuade our bullish view on healthcare at the turn of the calendar year. Biotechnology stocks continue to benefit from an M&A boom that has seen seven deals in the first seven weeks of 2024. The sector is moving as broad market headwinds (such as interest rates) are ebbing, being replaced by more favorable "risk on" tailwinds. Whilst Pharmaceutical companies are the most disparate we have ever seen, there is plenty of momentum for at least parts of that sector. Medical Technology tailwinds, an evolution of utilization that we think is durable, are as strong as we have seen in years. Finally, in Healthcare Services, whilst large managed care organizations are struggling, hospitals are benefiting from the sustained utilization uptick and niche players are being opportunistic.
It is the Board's policy to buy back the Company's shares if the share price discount to the net asset value per share exceeds 6% on an ongoing basis. Shares repurchased are held as treasury shares. Treasury shares can be sold back to the market at a later date at a premium to the cum income net asset value per share. Shareholders should note, however, that it remains very possible for the discount to be greater than 6% for extended periods of time particularly when sentiment towards the Company, the sector and to investment trusts generally remains poor. Any shares left in treasury are cancelled around the time of the Company's Annual General Meeting.
While buy backs may prove unable to prevent the discount from widening, they also enhance the net asset value per share for remaining shareholders and go some way to dampening discount volatility which can adversely affect investors' risk adjusted returns.
At times when there are unsatisfied buying orders for the Company's shares in the market, the Company has the ability to issue new shares or to re-issue treasury shares at a small premium to the cum income net asset value per share. This acts as an effective share price premium management tool.
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.
The Company is suitable for investors seeking an investment that aims to deliver total returns over the longer term (at least five years), is compatible with the needs for retail clients, professional clients and eligible counterparties, and is eligible for all distribution channels.
The Company may not be suitable for investors who are concerned about short-term volatility and performance, have low or no risk tolerance or are looking for capital protection, who are seeking a guaranteed or regular income, or a predictable return profile. The Company does not offer capital protection.
Frostrow Capital LLP has conducted an annual Value Assessment on the Company in line with Financial Conduct Authority (FCA) rules set out in the Consumer Duty regulation. The Assessment focuses on the nature of the product, including benefits received and its quality, limitations that are part of the product, expected total costs to clients and target market considerations.
Within this, the assessment considers quality of services, performance of the Company (against both benchmark and peers), total fees (including management fees and entry and exit fees as applicable to the Company), and also considers whether vulnerable consumers are able to receive fair value from the product.
Frostrow Capital LLP concluded that the Company is providing value based on the above assessment.
Worldwide Healthcare Company 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 Company. 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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