Franklin Templeton’s Biotechnology Discovery Fund and Invesco’s Global Health Care Fund have become the worst performing equity funds, both with cumulative three-year returns ending 31 March of nearly -12%, according to FE data.
The data is for funds in the universe of SFC-authorised equity funds with AUM of at least $100m and with a US dollar share class.
A look at the sector as a whole over the same period shows that healthcare was the second worst-performing sector, just after energy:
Bottom five performing sectors in Hong Kong
Healthcare indices also significantly underperformed the broader equity markets, despite the 2017 rally in global markets.
The S&P 500 Health Care Index returned 17.7% over the three-year period, which compares to the S&P 500’s 35.9%.
The case is similar in global markets, with the MSCI ACWI Health Care Index returning only about one-third of the MSCI ACWI:
The sector was also hit the worst in February when nearly all markets went into negative territory, Luke Ng, senior vice president at FE Advisory Asia, said in the firm’s Asia portfolio review.
But in spite of the sector’s underperformance, healthcare has emerged as one of the key themes in which industry players expressed optimism.
Roger Bacon, Citi Private Bank’s head of investments for Asia-Pacific, said previously that there has been a pick-up in demand for healthcare funds. Fan Cheuk-wan HSBC Private Bank’s head of investment strategy in Asia, believes that China’s healthcare sector will provide long-term opportunities amid the nation’s growing middle class and increasing purchasing power.
The sector is also a hot topic in alternatives, particularly in private equity. James Cheo, Bank of Singapore’s senior investment strategist, is seeing huge opportunities in the global healthcare sector. UBS Wealth Management’s Oncology Impact Fund, a fund that invests in companies that are active cancer research, raised $471m within a year after its launch, half of which came from Asia.
Of the top five worst-performing equity funds, the other three are Korea-, China- and Indonesia-focused products.
The bottom five performers 
