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Investment trust insider on biotech and healthcare

Investment Trust Insider on Capital Gearing Trust

Investment trust insider on biotech and healthcare – James Carthew: Why I will stick with biotech after Covid

It is now a year since the market meltdown triggered by the coronavirus. Just beforehand, I wrote an article exploring Orbimed’s thoughts on the US election’s potential impact on the healthcare sector. The manager of the Biotech Growth (BIOG) and Worldwide Healthcare (WWH) investment trusts was relatively upbeat about Covid-19 at that time, hopeful that the virus would turn out to be less deadly than feared and warmer weather would help bring it under control.

While the outcome was worse, it still seems remarkable to me that I, and millions of other UK citizens, have already been vaccinated against the disease.

Covid-19 has skewed returns in most markets and sectors and to some extent life sciences is no exception. For the closed-end funds in the Association of Investment Companies’ Biotechnology and Healthcare sector, you might have thought that the winners and losers in the race for a vaccine would be the predominant factor driving returns. However, the reality is more nuanced.

One-year numbers are distorted by see-sawing markets a year ago. However, when writing this article, I was amused to see that I own both the sector’s best and worst performing funds in net asset value (NAV) terms over the past 12 months. Top of the pile is Biotech Growth, bottom-placed is Syncona (SYNC). Fortunately, the latter has done rather better in share price terms.

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