Investment Trusts Quarterly: Biotechnology & healthcare trusts

The broad healthcare sector has a number of long-term value drivers. Chief among them are an ageing global population with more need of healthcare products and services, supported by increasing wealth and an ability to pay for drug treatments. The latter factor is especially true in the developing world. The biotechnology sub-sector is being buoyed by improved investor confidence emanating from the US, driven by increased M&A activity and speculation, and the ongoing necessity for large pharma companies to negotiate patent cliffs. Our healthcare team advocates a stock-picking approach where investors evaluate assets, potential and risk/reward. This should enable the identification of companies with an increased likelihood of solid share price performance, with or without M&A. For many investors this is an impossibly complex task and a specialist fund approach may be the answer.

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