Fiducia Wealth Management
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As part of our ongoing client communications, we like to regularly post quarterly Fund Manager Q&As, in an effort to give a little insight into the strategies of some of the managers within our portfolios. With the financial marketplace experiencing such unprecedented upheaval our Investment Committee is working continuously to adapt our portfolios to accommodate and protect against the global fluctuations and challenges presented by Covid-19.

This month, we hear from Trevor M. Polischuk – Partner, OrbiMed Advisor LLC, Co-Portfolio Manager of Worldwide Healthcare Trust PLC – who talks about his fund and hope you will find this both an interesting and timely read.

    1. Healthcare is clearly a hot topic at the moment – how long has the fund been operating and what have your historical returns been?

OrbiMed has been managing the Worldwide Healthcare Trust for over 25 years now.  The returns over that time have been very robust.  Since inception in 1995 (to 31 December 2020), our average annual return has been +16.0% which has materially outpaced both our benchmark and the broad market over that span.  In fact, the Worldwide Healthcare Trust is the #1 performing trust across all the UK since our inception.

2. Did the fund strategy change during the C19 pandemic and if so how?

Of course, the COVID-19 pandemic brought volatility to the equity markets but also opportunity. Whilst tempting to deviate from our focus, we mostly maintained core investment strategy during the past year. And that is a focus on innovation, which is currently at its peak in healthcare. Yes, we looked for extreme dislocations and pruned some positions that were more materially disrupted due to the pandemic, but we re-focused on fundamentals and our best ideas to increase the quality of the portfolio which ultimately led to meaningful alpha generation for the rest of the calendar year.

3. Tell us a little about the geographical make-up of the fund and a little about why it is as it is?

First and foremost, we are global investors. Our universe of coverage spans all healthcare subsectors and geographies, from the US to the UK, Europe, Japan, China (and other Emerging Markets).  But we have an important overweight in biotechnology stocks, especially smid-caps and the preponderance of them are located in the US. This is also directionally true of some other subsectors, such as managed care and life science tools companies.  As a result, approximately 2/3 of the portfolio is in the US. We also have a prominent overweight position in Emerging Markets. We have a full team based on the ground in China to help cultivate new ideas from a rapidly evolving market and new pocket of innovation emanating from that locale.

4.What do you see as the outlook for investing in healthcare?

The pandemic has pointed a spotlight on healthcare like never before.  And the sector has shone bright. The industry’s collective response has been nothing short of incredible. From hundreds of approved diagnostics, a half dozen approved therapies, and of course, multiple approved vaccines against COVID-19 – all in less than one year. Investors should know that this innovation is not limited to the novel coronavirus, but breakthroughs are occurring in cancer, diabetes, heart disease, neurological disorders, and inflammatory diseases. We are living in a golden era of innovation and I urge all investors to be sure to include proper exposure to healthcare in their portfolios as the innovation cycle still has a long way to play out.