Polar Capital Global Healthcare Trust plc (the "Company"): The Company is an investment company with investment trust status and its shares are excluded from the Financial Conduct Authority’s (“FCA”) restrictions on the promotion of non-mainstream investment products. The Company conducts its affairs, and intends to continue to conduct its affairs, so that the exemption will apply.
The Company is an Alternative Investment Fund under the EU's Alternative Investment Fund Managers Directive 2011/61/EU as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018.
The Investment Manager: Polar Capital LLP is the investment manager of the Company (the "Investment Manager"). The Investment Manager is authorised and regulated by the FCA and is a registered investment adviser with the United States' Securities and Exchange Commission.
Key Risks
- Investors' capital is at risk and there is no guarantee the Company will achieve its objective.
- Past performance is not a reliable guide to future performance.
- The value of investments may go down as well as up.
- Investors might get back less than they originally invested.
- The value of an investment’s assets may be affected by a variety of uncertainties such as (but not limited to): (i) international political developments; (ii) market sentiment; and (iii) economic conditions.
- The shares of the Company may trade at a discount or a premium to Net Asset Value.
- The Company may use derivatives which carry the risk of reduced liquidity, substantial loss and increased volatility in adverse market conditions.
- The Company invests in assets denominated in currencies other than the Company's base currency and changes in exchange rates may have a negative impact on the value of the Company's investments.
- The Company invests in a concentrated number of companies based in one sector. This focused strategy can lead to significant losses. The Company may be less diversified than other investment companies.
- The Company may invest in emerging markets where there is a greater risk of volatility than developed economies, for example due to political and economic uncertainties and restrictions on foreign investment. Emerging markets are typically less liquid than developed economies which may result in large price movements to the Company.
Important Information
Not an offer to buy or sell: This document is not an offer to buy or sell or a solicitation of an offer to buy or sell any security, and under no circumstances is it to be construed as a prospectus or an advertisement. This document does not constitute, and may not be used for the purposes of, an offer of the securities of, or any interests in, the Company by any person in any jurisdiction in which such offer or invitation is not authorised.
Information subject to change: Any opinions expressed in this document may change.
Not Investment Advice: This document does not contain information material to the investment objectives or financial needs of the recipient. This document is not advice on legal, taxation or investment matters. Prospective investors must rely on their own examination of the consequences of an investment in the Company. Investors are advised to consult their own professional advisors concerning the investment.
No reliance: No reliance should be placed upon the contents of this document by any person for any purposes whatsoever. None of the Company, the Investment Manager or any of their respective affiliates accepts any responsibility for providing any investor with access to additional information, for revising or for correcting any inaccuracy in this document.
Performance and Holdings: All data is as at the document date unless indicated otherwise. Company holdings and performance are likely to have changed since the report date. Company information is provided by the Investment Manager.
Benchmark: The Company is actively managed and uses the MSCI All Country World Index/Healthcare as a performance target. The benchmark is considered to be representative of the investment universe in which the Company invests. The performance of the Company is likely to differ from the performance of the benchmark as the holdings, weightings and asset allocation will be different. Investors should carefully consider these differences when making comparisons. Further information about the benchmark can be found at: www.mscibarra.com.
Third-party Data: Some information contained in this document has been obtained from third party sources and has not been independently verified. Neither the Company nor any other party involved in compiling, computing or creating the data makes any warranties or representations with respect to such data, and all such parties expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any data contained within this document.
Country Specific Disclaimers
United States: The information contained within this document does not constitute or form a part of any offer to sell or issue, or the solicitation of any offer to purchase, subscribe for or otherwise acquire, any securities in the United States or in any jurisdiction in which such an offer or solicitation would be unlawful. The Company has not been and will not be registered under the United States Investment Company Act of 1940, as amended (the “Investment Company Act”) and, as such, the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Company will be offered and sold only outside the United States to, and for the account or benefit of non-U.S. Persons in “offshore- transactions” within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained in this document, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
Further Information about the Company: Investment in the Company is an investment in the shares of the Company and not in the underlying investments of the Company. Further information about the Company and any risks can be found in the Company’s Key Information Document, the Annual Report and Financial Statements and the Investor Disclosure Document which are available on the Company's website, found at: https://www.polarcapitalglobalhealthcaretrust.co.uk
Fund Manager Commentary As at 28 February 2025
Market and sector review
After getting off to a very strong start in January, global equity markets turned negative in February. A flight to safety characterised much of the month: cyclical sectors significantly underperformed their defensive counterparts and large-cap stocks outperformed small and mid-caps. This sudden rotation away from riskier areas of the market benefitted the healthcare sector which outperformed the broader market in February.
The trading within healthcare reflected a similar risk-off attitude by investors: pharmaceuticals, biotechnology, healthcare services and distributors performed strongly, while life sciences tools and services, healthcare supplies, managed care and healthcare facilities posted negative returns.
Multiple factors contributed to the abrupt change in direction of the market. First, the US macroeconomic picture became more complicated with data pointing to a weakening consumer (both in terms of spending and sentiment), a cooling of the labour market (lower job openings; higher jobless claims; non-farm payrolls declining) and a hotter than anticipated inflation number. While GDP growth seems to be resilient, the aforementioned data points could portend a more stagnant US economy.
Second, corporates reported end-of-year results and issued outlooks for 2025 that led many analysts to downgrade their earnings expectations across most sectors. Finally, political noise became louder, with President Trump touting broad tariffs that would significantly hamper imports into the US and could stoke inflation once again.
In healthcare, US politics dominated the narrative. The new administration confirmed Robert F Kennedy Jr as its health secretary, blocked part of the funding for the National Institute of Health, cancelled February’s meeting of ACIP (Advisory Committee on Immunization Practices), a key meeting where decisions on vaccines are made, and ramped up the pressure on finding ways to cut costs within the healthcare system, with a particular focus on Medicaid. Given the added threat of tariffs and a fairly mixed earnings season, it is perhaps unsurprising that investors fled to areas of healthcare which are considered more defensive and less exposed to political uncertainty.
Fund performance
The Company’s NAV decreased by 3.8% in February, compared to its benchmark, the MSCI All Country World Daily Net Total Return Health Care Index, which was down 0.2% for the month.
Positive relative contributors relative to the benchmark in February were Thermo Fisher Scientific, Merck and Merus.
The Fund had no exposure to either of the first two, both of which had a challenging month. There was no thesis-changing news for Thermo Fisher Scientific, a company that continues to struggle alongside its life sciences and tools peers, with the key concerns appearing to be China and the state of NIH (National Institutes of Health) funding.
Merck’s weakness follows a disappointing FY24 update, when it disclosed that it has temporarily paused shipments of an HPV (human papillomavirus vaccine), Gardasil, to China.
Clinical-stage oncology company Merus performed strongly, with the only news of real note being the US Food and Drug Administration (FDA) awarding key pipeline asset Petosemtamab a ‘Breakthrough Therapy’ designation for the treatment of head and neck cancer.
Negative relative contributors in the period under review were Medley, AbbVie and Stevanato Group.
Medley’s struggles were in direct response to FY24 results that missed expectations, coupled with FY25 guidance that came in below consensus expectations.
The Fund had no exposure to AbbVie during February, a company that rallied strongly alongside other large-cap biotechnology and pharmaceutical stocks given their defensive characteristics.
There was no thesis-changing news on Stevanato Group during the month.
We added positions in US distributor Cardinal Health and US-based medical device company NeuroPace during February. In a healthcare subsector with less exposure to political rhetoric than others, Cardinal Health has been delivering consistent earning upgrades, has multiple growth drivers and we believe it is attractively valued.
NeuroPace focusses on the treatment of epilepsy using a system that responds to a patient’s unique seizure fingerprint. The additions were funded, in part, by exiting positions in Amvis Holdings and Intelligent Ultrasound Group.
Outlook
It is no understatement that February was extremely challenging from an investment perspective. Uncomfortable macroeconomic updates, especially at the consumer level, sporadic tariff stress and an administration that is potentially looking to generate significant savings in areas of healthcare such as the NIH and Medicaid have all created levels of uncertainty that were hard to predict.
The near-term volatility is uncomfortable, but the conviction that healthcare is a defensive sector that is innovating and has attractive growth prospects should not be missed amid the distractions.
James Douglas
James studied medicinal chemistry and has worked in healthcare, in sales, research and fund management, throughout his career
Gareth Powell
Gareth worked at a pharmaceutical company and in academic laboratories before setting up the healthcare team in 2007
Historical Fact Sheets