Media Release of May 31, 2017

A straightforward idea leads to solid outperformance - the Adamant Global Healthcare Index celebrates its 10-year anniversary
 

The idea behind the launch of the Adamant Global Healthcare Index in April 2007 was simplistic and successful. Investors should focus more on mid-cap stocks rather than the somewhat unwieldy large caps and deviate from conventional benchmarks that place a disproportionate emphasis on pharma compared to other sub-sectors in the healthcare universe. "We wanted to give our clients access to the diverse range of investment opportunities that the healthcare sector offers. Pharma stocks currently account for less than 10% of our portfolio. Even from a historical perspective, pharma has always been heavily underweighted in the index, while other healthcare sub-sectors such as medtech, services, generics and biotech have been overweighted. That approach has served us very well over the past ten years," says Dr. Cyrill Zimmermann, Head Healthcare Funds & Mandates at Bellevue Asset Management.

From an index to a fund

Since inception, the index has produced an excess return of 189% relative to the MSCI World Index and of 125% relative to the MSCI World Health Care Index. The absolute performance since its launch is 234% (in USD). The success of the Adamant Healthcare Index led to the 2011 launch of a Swiss investment fund for institutional investors that replicates the index. This Swiss fund was followed by the launch of a similar Luxembourg-based fund product in October 2016. The BB Adamant Healthcare Index (Lux) Fund (ISIN B-USD LU1477742909) is registered for public distribution in Germany, Austria, Switzerland and Luxembourg. A total of CHF 190 mn is invested according to this proprietary index methodology.

Focus on sweet spots

Every half-year, the 40 most attractive stocks in the global healthcare universe are selected for the index. The BB Adamant Healthcare Team thoroughly screens about 600 of the 3 000 listed companies in the healthcare sector based on eight criteria to make this selection. Four quantitative and four qualitative parameters are applied. The qualitative parameters measure the quality and track record of a company's management team, product pipeline and operating risks as well as country-related risks, while the quantitative parameters provide information on stock valuations. There are four regions, Western Europe, North America, Japan/Australia and Emerging Markets, and the index is composed of the ten best stocks from each region.

The region with the highest overall score, usually North America, can have a maximum index weighting of 35% when the index is rebalanced, so more emphasis is put on emerging markets. Companies with high valuations and low growth rates are rarely in the index. Historical index data shows that mid-cap stocks have typically represented 60% to 80% of the index and the Asia region has accounted for about one-third of the index. Pharma stocks are clearly underweighted compared to their weighting on the MSCI World Health Care Index, the standard sector benchmark.

Outlook just as attractive as ever

"Biotech and generics companies are showing double-digit growth rates, whereas pharma companies are producing little growth," notes Cyrill Zimmermann. "The non-drug segment has served as an anchor of stability. Medical technology companies are undergoing an industrial transformation and offering integrated services that leverage the latest big data technologies. This is a continual process that harbors tremendous potential."
 

For further information, please contact:

Bellevue Asset Management AG, Seestrasse 16 / P.O. Box, CH-8700 Küsnacht/Zurich
Tanja Chicherio, Tel. +41 44 267 67 09, tch@bellevue.ch

www.bellevue.ch

Bellevue Asset Management

Bellevue Asset Management and its sister company StarCapital based in Oberursel outside Frankfurt, Germany, are part of Bellevue Group, an independent, Swiss financial group with a registered office in Zurich and a listing on the Swiss Exchange SIX. Bellevue was established in 1993 and has since become a leading investment boutique with a focus on healthcare, regional strategies, multi-asset solutions and global equity and bond funds. Assets under management amount to CHF 7.9 bn.

Disclaimer: This document is neither directed to, nor intended for distribution or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. The information and data presented in this document are not to be considered as an offer or solicitation to buy, sell or subscribe to any securities or financial instruments. The information, opinions and estimates contained in this document reflect a judgment at the original date of release and are subject to change without notice. No liability is assumed for its correctness and accuracy. This information pays no regard to the specific or future investment objectives, financial or tax situation or particular needs of any specific recipient and in particular tax treatment depends on individual circumstances and may be subject to change. This document is not to be relied upon in substitution for the exercise of independent judgment. Before making any investment decision, investors are recommended to ascertain if this investment is suitable for them in the light of their financial knowledge and experience, investment goals and financial situation, or to obtain specific advice from an industry professional. The details and opinions contained in this document are provided without any guarantee or warranty and are for the recipient's personal use and information purpose only. Every investment involves risk, especially with regard to fluctuations in value and return, and investors' capital may be at risk. If the currency of a financial product is different from your reference currency, the return can increase or decrease as a result of currency fluctuations. Past performance is no indicator for the current or future performance. The performance data are calculated without taking account of commissions and costs that result from subscriptions and redemptions. Commissions and costs have a negative impact on performance. This document does not reflect any risks related to investments into the mentioned securities and financial instruments. Financial transactions should only be undertaken after having carefully studied the current valid prospectus and are only valid on the basis of the latest version of the prospectus and available annual and semi-annual reports. As the funds are recognised (ie. registered) but not authorised in the UK, the UK Financial Services Authority's financial services compensation scheme does not apply to investments in the fund but the Financial Services Authority regulated firm approving this document for the purposes of UK regulation has taken reasonable steps to satisfy itself that Bellevue will deal in an honest and reliable way and is so satisfied. The Bellevue Funds (Lux) SICAV is admitted for public offering and distribution in Switzerland. Representative agent in Switzerland: Acolin Fund Services AG, Affolternstrasse 56, CH-8050 Zürich and paying agent in Switzerland: Bank am Bellevue AG, Seestrasse 16, P.O. Box, CH-8700 Kusnacht. The Bellevue Funds (Lux) SICAV is admitted for public distribution in Austria. Paying and information agent: Erste Bank der oesterreichischen Sparkassen AG, Graben 21, A-1010 Vienna. The Bellevue Funds (Lux) SICAV is admitted for public distribution in Germany. Paying and information agent: Bank Julius Bär Europe AG, An der Welle 1, P.O. Box, D-60062 Frankfurt a. M. The Bellevue Funds (Lux) SICAV is recognised for public offering and distribution in the United Kingdom. Facilities agent: Global Funds Registration Limited, 1st Floor, 10 New Street, London EC2M 4TP.The Bellevue Funds (Lux) SICAV is registered with the CNMV under the number 938. Prospectus, Key Investor Information Document ("KIID"), the articles of association as well as the annual and semi-annual reports of the Bellevue Funds under Luxembourg law are available free of charge from the above mentioned representative, paying, facilities and information agents as well as from Bellevue Asset Management AG, Seestrasse 16, CH-8700 Kusnacht.