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 31 December 2024
Market and sector review
Historically, December’s trading environment has been characterised by thin volumes and heightened volatility and this year was no exception. Equity markets struggled and finished the last month of 2024 in negative territory. The narrowness of the market which was a feature throughout the year continued in December, with information technology, communication services and consumer discretionary being the best performing sectors. Given the strength in year-to-date winners, it should be no surprise that healthcare lagged the broader market. Within healthcare, the best performing subsectors were healthcare information technology, life sciences tools and services, healthcare equipment and pharmaceuticals. Healthcare services, managed care, healthcare facilities, supplies, and distributors had a more challenging month.
There was no thesis-changing news on the macroeconomic front. Data points to a resilient US economy, with inflation abating (perhaps slower than expected) and unemployment only marginally ticking up. The Federal Reserve, which has a dual mandate of managing inflation and achieving full employment, cut the US benchmark interest rate by only 25 basis points, remaining in ‘wait-and-see’ mode as a hasty unwinding of the tightened monetary conditions might stoke inflation without a benefit to economic growth.
After a difficult November, healthcare continued to languish, with the moves lower driven by sector-specific dynamics. In particular, the political news flow once again pressured managed care companies. This time it was due to proposed policies aimed at increasing transparency in the pharmacy benefits manager (PBM) business model, reducing the role of PBMs in negotiating drug prices and even at eliminating the rebates PBMs receive from drug manufacturers. Additionally, there remains uncertainty around the upcoming US administration change, an administration whose views on healthcare remain opaque, leaving generalist investors unengaged with the sector. This lack of interest was perhaps even more exacerbated by a series of underwhelming or disappointing clinical trials results relative to elevated expectations in areas such as pain management, Parkinson’s disease and obesity.
Fund performance
The Company’s NAV returned -5.6% in December, compared to -4.5% for its benchmark, the MSCI All Country World Daily Net Total Return Health Care Index) (in sterling terms).
Positive contributors relative to the benchmark in December were Stevanato Group, UCB and Swedish Orphan Biovitrum.
There was no thesis-changing news on Stevanato Group although the company did host a plant tour in mid-December that highlighted the company’s market leadership and key growth drivers, an event that was well received by those who attended. Neither UCB nor Swedish Orphan Biovitrum benefitted from positive news flow, with both appearing to benefit from increasing enthusiasm for recent launches that should provide near and medium-term top-line momentum.
Negative contributors in the period under review were Avidity Biosciences, RxSight and Novo Nordisk.
There was no company-specific news on Avidity Biosciences during December, with the stock caught up in the broader biotechnology selloff. RxSight struggled, the primary reason appearing to be a sell-side survey that highlighted increasing competition and the potential for moderating volumes in 2025. Late in the month, Novo Nordisk disclosed late-stage clinical data for key obesity asset CagriSema. While positive, with weight loss of 22.7% after 68 weeks, the results fell short of elevated market expectations which were north of 25%. The negative reaction to the miss was exacerbated by a surprising revelation that Novo Nordisk introduced flexible dosing into the study, effectively allowing patients to titrate down to either control their side-effects or to manage the extent of their weight loss.
We added positions in Sysmex and Exact Sciences in December. Sysmex, a Japanese medical devices company, focusses on the field of haematology and is enjoying a new product cycle that could help the company deliver high single-digit top-line growth and double-digit earnings growth. There is also a sense that the new management team is very focussed on costs and margin expansion. Exact Sciences is focussed on the development and commercialisation of a non-invasive screening test for the early detection of colorectal cancer. After a difficult 2024 in the field, 2025 could see a revenue acceleration driven by a refocussed salesforce, incentives to drive preventative medicine, positive pricing and ongoing demand for the company’s key screening products.
Outlook
On a relative basis, 2024 was an extremely challenging one for healthcare with the sector very much out of favour, as illustrated by ETF outflows and depressed valuations. As we look forward, however, there are plenty of reasons to be optimistic, a view based on high levels of innovation, new product cycles and ongoing demand for healthcare products and services. US political headlines may well create short-term volatility, but when there is greater clarity on the investment landscape, the market can refocus on the industry’s strong fundamentals that could deliver earning growth ahead of the broader market in 2025.
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