Swiss trusts top performers among bio sector specialists in Feb

Swiss trusts top performers among bio sector specialists in Feb – Switzerland’s HBM Healthcare Investments (HBMN.S) and BB Biotech (BBB.S) were the best performing biotech/pharma specialist investment trusts in February and indeed were the only ones of the 13 monitored by Marten & Co to have recorded any increase in NAV (in sterling terms) in the month.  However, both trusts also saw a small falls in their share price over the same period, reflecting the sector and market-wide sell off of equities last month. This performance had been expected by Quoteddata.com based on an analysis published last month.

HBM notched up a 1.1% rise in NAV, while BB Biotech achieved a smaller 0.4% gain, for February. HBM’s good out-turn was achieved despite the poor performance of its largest investment, Vectura (6.3% of NAV, as of end January), which has seen a 20% fall in share price in the month. However, HBM – unlike its peers – has a short position on the Nasdaq biotechnology index, which will gain  if the index value falls, as indeed occurred over the month and this may have been a key factor in its performance.

Pharmaceuticals was, as would perhaps be expected, more resilient than biotech in February’s falling markets and five trusts with a focus on pharmaceutical and/or diversified healthcare stocks all beat the 2.3% decline in the Nasdaq biotechnology index, albeit with declines of 1-2% in terms of sterling-denominated NAV. The benchmark index itself for biotech fell as a result of some surprisingly large falls for major US biotechs in the period. These have included, in recent days, a major stock price fall for Celgene after the disclosure of a major regulatory snafu in the form of a refusal-to-file letter from the FDA for its high-profile multiple sclerosis drug ozanimod.

Among the six pure biotech investors, US-listed Tekla Life Sciences (HQL) was the only other one to have outperformed the index, while the UK’s International Biotechnology Trust (IBT), recorded a better relative performance that its nearest peer, Biotechnology Growth Trust (BIOG) as a result of its investment strategy that tends to have underweight positions in the large capitalisation US biotechs. The NAV and share price performance (total return) of the 13 biotech-specialist investment trusts monitored by Marten & Co, ranked by NAV return in February is shown in the table below.

Over the two-month YTD period, BB Biotech came out top with a 2.7% rise in NAV beating HBM to second place with Tekla Life Sciences third.  January saw a strong rise in Nasdaq Biotech Index although this was reversed in February. As above, the NAV and share price performance (total return) for the period from 1 January to 28 February is shown below.

BBH / BIOG / IBT / PCGH / WPCT / Swiss trusts top performers among bio sector specialists in Feb. Once again, Woodford Patient Capital Trust (WPCT) (whose portfolio is around 70% healthcare) saw the poorest performance in this group both in February and the YTD period. WPCT’s shares have also fallen by nearly 11% since 1 January, the largest decline of any of the specialist funds monitored here.