The Global Equity Sustainable Healthcare Fund aims to provide investors a long-term total return by investing in a concentrated portfolio of companies that may benefit from increasingly constrained healthcare budgets world-wide, while promoting ESG characteristics, HSBC Asset Management said.
“The current healthcare model is not sustainable and patient outcomes are being negatively impacted alongside the industry and investors. This fund aims to address this inequality and invest in companies that are offering different approaches through new treatment options, technology and innovative business models.” Nathalie Flury and Michael Schröter, managers of the fund, said in a statement.
The fund, which was available to Hong Kong professional investors in July last year, has accumulated assets of $105m. It has now received approval from the Securities and Futures Commission for sale to retail investors in Hong Kong.
The fund, which is managed by Michael Schroter and Nathalie Flury, has generated a -15.38% return so far this year, in US dollars, while its cumulative return since launch is -17.15%, as compared with its sector average of -17.28%, according to FE Fundinfo.
At the end of January this year, the fund’s top five holdings were: Unitedhealth Group, Vertex Pharmaceuticals, Thermo Fisher Scientific, Abbott Laboratories and Edwards Lifesciences. About 84% of the fund is invested in US companies, according to the fund’s factsheet.
The top five sectors were: biotechnology, healthcare equipment & supplies, healthcare providers & services, life sciences tools & services and pharmaceuticals.
One of the main sustainability challenges facing the healthcare sector today is cost, according to HSBC AM. As medical costs continue to grow, a basic social need becomes increasingly inaccessible to much of the population, it said.
In order to address this challenge and drive social impact without sacrificing on performance, the fund will invest in a range of 30-60 healthcare companies with a mid-cap and growth focus in developed and emerging markets, according to HSBC AM.
These companies will be offering affordable innovation with advantages in the market, it added, and there will be no fixed allocations across geographies, sub-subsectors, company stages, and/or profitability.
“As healthcare spending consistently outpaces GDP growth across markets, rising costs are straining healthcare systems globally which results in access restrictions. Investing in companies that focus on healthcare innovation may reduce the overall cost for all stakeholders in the system,” Alison Brown, director & head of sales, wholesale business of Hong Kong and China at HSBC AM, said.
“The investment approach of the fund echoes with HSBC’s focus on sustainable investment, it also lines up with market demand on thematic funds,” she said.
