Worldwide Healthcare Trust (WWH) portfolio manager Sam Isaly is optimistic about the future of the healthcare industry thanks, in part, to strong innovation from emerging biotechs. Run by OrbiMed Capital, the investment trust invests in the global healthcare sector in a bid to achieve high capital growth.
Isaly also believes that pharmaceuticals companies are on the cusp of a period of positive earnings momentum after recent caps on growth from drug patent expirations. The fund manager also thinks that investors are returning to core company fundamentals after being transfixed by macroeconomic issues in the past.
Legislative developments in the US could play a further role as it might encourage more investment and business development.
Isaly believes that the rally in healthcare stocks since late 2016 was prompted by the election of US President Donald Trump. Among the industry's many challenges in 2016 were doubts cast by the US election. The theory went that if Hillary Clinton had got in to the White House it could have resulted in stricter drug pricing controls, potentially gnawing away at industry profit margins.
Trump, on the other hand, has plans to speed up the approval process of new drugs.
Worldwide Healthcare Trust outperformed its benchmark MSCI World Health Care Index in the year to 31 March 2017, chalking-up a 28.9% increase in net asset value (NAV), in sterling terms. That compares to a 24.5% return of the benchmark.
