Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
magazineGrab a slice of top performing Bellevue Healthcare Trust at a discount to NAV
The Bellevue Healthcare Trust (BBH) has built an enviable track record since launching in 2016. Shares believes the 5.6% discount to NAV (net asset value) presents investors with an attractive entry point.
The trust has delivered three-and five-year total returns in NAV of 70.3% and 91.8% respectively, comfortably beating its benchmark (MSCI World Healthcare) returns of 48.6% and 71.2%.
Dividends have grown in double digit percentages since launch. In 2021 the company paid 6.03p per share which represents a trailing yield of 3.4%.
Historically the healthcare sector has provided relative defensiveness and perhaps surprisingly, good protection against rising prices.
A DIFFERENTIATED APPROACH
The trust is managed by Bellevue Asset Management, part of Swiss investment manager the Bellevue Group.
Portfolio managers Paul Major and Brett Drake have more than two decades of healthcare experience each.
The managers start from the premise that the Western healthcare systems are not fit for purpose. They argue the systems are very costly to run, wasteful and therefore unsustainable.
The strategy addresses all stages of patient interactions and costs within the healthcare system focusing on investments aimed at providing solutions to the cost challenge. Some of the key themes include greater integration of technology, innovation in therapeutics and novel treatments, increased diagnostic personalization, population genomics and shifting payment models.
Within these themes the managers undertake bottom-up fundamental analysis to isolate the most promising stock candidates. The team construct a high conviction, concentrated portfolio currently consisting of 29 names selected for their three-to-five-year return potential. Portfolio turnover is low.
It is worth noting around 77% of the portfolio is invested in mid and small-cap companies which means the value of the trust swings around more than the benchmark. Approximately 95% of the portfolio is invested in the US compared with 73% for the benchmark.
The managers point out that during times of heightened uncertainty, investors often flock to the relative safety of mega-cap pharma which can harm short-term performance, given the trust’s relative underweight position in larger companies.
The trust has an ongoing charge of 1.08% a year, slightly higher than other listed healthcare trusts, Polar Capital Global Healthcare (PCGH) (0.92%) and Worldwide Healthcare (WWH) (0.85%).
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
