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BELLEVUE HEALTHCARE TRUST: Managers confident for future

BELLEVUE HEALTHCARE CONFIDENCE: Managers are confident in the future of the global healthcare industry







The managers of investment fund Bellevue Healthcare are convinced that the future of the global healthcare sector is bright. The aging of the world’s population and the exponential growth of chronic diseases ensure that the demand for health services will continue regardless of an economic downturn.

The management team is so confident that they have used £80m in cheap loans since the beginning of the year to boost the trust’s stakes in the stock markets.

The two individuals overseeing the £1bn portfolio – Paul Major and Brett Darke – have also been in the business of buying more personal shares in the trust, a clear sign that they believe the outlook is more positive than negative.

BELLEVUE HEALTHCARE TRUST Managers confident for future

“Of course, as an equity investor, you can’t ignore the Putin factor,” Major says, “or for that matter geopolitical tensions in the South China Sea. It explains why we’ve kept some gunpowder dry in case something happens that causes stock prices to plummet sharply and suddenly. If that happened, we would use the loans we have yet to use to buy even more stock in the companies we own.

The fact remains that many of the companies we invest in are super-resilient companies that will continue to grow. They provide a measure of security in an uncertain world.

The trust is invested in 29 health stocks, most of which are listed in the United States. “We’re monitoring about 250 companies,” says Major. ‘Most are small to medium-sized companies that do special things in healthcare. But their stock prices have been hit by the general decline in the value of US stocks over the past nine months.”

Bellevue’s numbers confirm this. In the past year, the trust has recorded a loss of nearly 9 percent. This compares to five-year profits of 73 percent.

“Our job is to find companies that can deliver healthcare solutions, whether it’s disease prevention, diagnosis, treatment or recovery,” Major says. Among the top 10 trusts is CareDx, an American company that provides home testing kits to people who have undergone major organ transplants.

“The tests help reduce the risk of organ rejection,” Major says. “They are able to identify any adverse effects on the replacement organ as a result of the drugs used — and any weakening of the immune system that could cause other conditions.”

1659820837 784 BELLEVUE HEALTHCARE TRUST Managers confident for future

1659820837 784 BELLEVUE HEALTHCARE TRUST Managers confident for future

The investment trust has had an occasional stake in CareDx over the years, but reinvested in the company last September.

Another large fund stake is in Axonics, a company that has developed a small electronic implant that helps people who suffer from involuntary bladder or bowel leakage. The implant sends out a current that stimulates the nerves that control the bladder and bowel, stopping leakage. When someone wants to use the toilet, they deactivate the implant via a hand switch. Axonics’ quarterly financial results, released last week, showed a 50 percent increase in operating income, compared to the same period last year.

The trust has a stock identifier of BZCNLL9 and a ticker of BBH. Annual costs total 1.1 percent.

Given its specialist nature, it is a fund that should only make up a small part of an investor’s portfolio. An attractive feature is that it pays a regular dividend, equal to about 3.5 percent per year.

The latest interim dividend of 3,235 pence is comparable to last year’s payment of 3,015 pence and a share price of £1.74.

Rival trusts include Polar Capital Global Healthcare and Worldwide Healthcare.