Worldwide Healthcare results for the year ended 31 March 2020 show an NAV return of 6.5%, ahead of the benchmark’s 5.7%. The premium edged a little higher to 1.8% from 0.3%, giving shareholders a return of 8.0%. The dividend has fallen to 25p from 26.5p – but this trust is not about dividends. The NAV and share price hit all time highs on 18 May 2020 and the trust is close to £2bn in size. The weak pound relative to the US dollar helped returns.
The chairman says “During the year the company’s portfolio manager consistently pursued a strategy of being underweight in large pharmaceutical and biotechnology companies and overweight in emerging markets and emerging biotechnology companies, as they had found that the number of attractive investment opportunities there had increased markedly over recent years due in part to a strong biotechnology IPO market and also to increased levels of M&A activity. In the first half, this strategy was penalised primarily because of our conviction-based overweight positions in emerging biotechnology stocks which suffered during a period of market instability as investors switched out of these stocks in favour of large pharmaceutical stocks where we were underweight. In the second half our strategy paid off particularly in the third quarter of the financial year when investors refocussed on industry fundamentals leading to strong returns particularly from emerging biotechnology stocks and from emerging markets.
Positive contributions during the year also came from our holdings in medical technology companies and healthcare services companies, whereas life sciences tools companies and also Japan did not perform so well and were negative contributors to performance during the year.”
“The impact of the coronavirus pandemic on markets in the first three months of 2020 and subsequently has been dramatic. On balance the company has been a beneficiary as, following a fall in the share price from 3130.0p, as at 31 December 2019, to 2,920.0p, as at 31 March 2020, it has risen strongly since the company’s year-end to 3,505.0p, as at 2 June 2020 as investors recognised that a key consequence of this crisis is most likely to be a significant increase in investment in drug development and healthcare provision together with the development of more efficient methods of treatment delivery for patients.”
The manager’s report contains much more detail on the portfolio but it is a bit too long to reproduce here. Look out for the annual report in the documents tab of Worldwide healthcare’s page on this website.