Polar Capital Global Healthcare Trust plc (the "Company"): The Company is an investment company with investment trust status and its shares are excluded from the Financial Conduct Authority’s (“FCA”) restrictions on the promotion of non-mainstream investment products. The Company conducts its affairs, and intends to continue to conduct its affairs, so that the exemption will apply.
The Company is an Alternative Investment Fund under the EU's Alternative Investment Fund Managers Directive 2011/61/EU as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018.
The Investment Manager: Polar Capital LLP is the investment manager of the Company (the "Investment Manager"). The Investment Manager is authorised and regulated by the FCA and is a registered investment adviser with the United States' Securities and Exchange Commission.
Key Risks
- Investors' capital is at risk and there is no guarantee the Company will achieve its objective.
- Past performance is not a reliable guide to future performance.
- The value of investments may go down as well as up.
- Investors might get back less than they originally invested.
- The value of an investment’s assets may be affected by a variety of uncertainties such as (but not limited to): (i) international political developments; (ii) market sentiment; and (iii) economic conditions.
- The shares of the Company may trade at a discount or a premium to Net Asset Value.
- The Company may use derivatives which carry the risk of reduced liquidity, substantial loss and increased volatility in adverse market conditions.
- The Company invests in assets denominated in currencies other than the Company's base currency and changes in exchange rates may have a negative impact on the value of the Company's investments.
- The Company invests in a concentrated number of companies based in one sector. This focused strategy can lead to significant losses. The Company may be less diversified than other investment companies.
- The Company may invest in emerging markets where there is a greater risk of volatility than developed economies, for example due to political and economic uncertainties and restrictions on foreign investment. Emerging markets are typically less liquid than developed economies which may result in large price movements to the Company.
Important Information
Not an offer to buy or sell: This document is not an offer to buy or sell or a solicitation of an offer to buy or sell any security, and under no circumstances is it to be construed as a prospectus or an advertisement. This document does not constitute, and may not be used for the purposes of, an offer of the securities of, or any interests in, the Company by any person in any jurisdiction in which such offer or invitation is not authorised.
Information subject to change: Any opinions expressed in this document may change.
Not Investment Advice: This document does not contain information material to the investment objectives or financial needs of the recipient. This document is not advice on legal, taxation or investment matters. Prospective investors must rely on their own examination of the consequences of an investment in the Company. Investors are advised to consult their own professional advisors concerning the investment.
No reliance: No reliance should be placed upon the contents of this document by any person for any purposes whatsoever. None of the Company, the Investment Manager or any of their respective affiliates accepts any responsibility for providing any investor with access to additional information, for revising or for correcting any inaccuracy in this document.
Performance and Holdings: All data is as at the document date unless indicated otherwise. Company holdings and performance are likely to have changed since the report date. Company information is provided by the Investment Manager.
Benchmark: The Company is actively managed and uses the MSCI All Country World Index/Healthcare as a performance target. The benchmark is considered to be representative of the investment universe in which the Company invests. The performance of the Company is likely to differ from the performance of the benchmark as the holdings, weightings and asset allocation will be different. Investors should carefully consider these differences when making comparisons. Further information about the benchmark can be found at: www.mscibarra.com.
Third-party Data: Some information contained in this document has been obtained from third party sources and has not been independently verified. Neither the Company nor any other party involved in compiling, computing or creating the data makes any warranties or representations with respect to such data, and all such parties expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any data contained within this document.
Country Specific Disclaimers
United States: The information contained within this document does not constitute or form a part of any offer to sell or issue, or the solicitation of any offer to purchase, subscribe for or otherwise acquire, any securities in the United States or in any jurisdiction in which such an offer or solicitation would be unlawful. The Company has not been and will not be registered under the United States Investment Company Act of 1940, as amended (the “Investment Company Act”) and, as such, the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Company will be offered and sold only outside the United States to, and for the account or benefit of non-U.S. Persons in “offshore- transactions” within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained in this document, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
Further Information about the Company: Investment in the Company is an investment in the shares of the Company and not in the underlying investments of the Company. Further information about the Company and any risks can be found in the Company’s Key Information Document, the Annual Report and Financial Statements and the Investor Disclosure Document which are available on the Company's website, found at: https://www.polarcapitalglobalhealthcaretrust.co.uk
Fund Manager Commentary As at 31 July 2025
Market and sector review
The positive run that global equity markets have experienced of late continued unabated in July, led once again by the technology and utilities sectors, as well as other economically sensitive areas of the market such as industrials and consumer discretionary. With a resilient economy, supportive labour trends, tame inflation and the AI-driven capital investment boom, it should not be surprising that risk-on investors shied away from healthcare. Within healthcare, life sciences tools and services, biotechnology and pharmaceuticals performed the best, while managed care, healthcare supplies, services and facilities had a particularly difficult month.
July saw the start of Q2’s reporting season that so far has been characterised by some stupendous moves in share prices and sharp rotations among healthcare sectors. The dominant theme was ‘positioning,’ which heavily influenced investors’ reactions to earnings announcements. Heavily out-of-favour Contract Research Organisations, which provide services such as running clinical trials to the biopharmaceutical industry, and life sciences tools and services stocks experienced strong rallies on the back of improved underlying market dynamics and encouraging earnings. On the other hand, crowded sectors such as medical devices and facilities, despite generally positive results, were not rewarded by investors who started to question the durability of the ‘utilisation trade’.
It was clear that utilisation of healthcare showed signs of decelerating but remained elevated in Q2. The heightened utilisation, especially in the Medicaid population and in the so-called exchanges (a type of subsidised commercial healthcare insurance plan), put pressure on managed care organisations, with many insurance companies forced to severely cut their earnings guidance for the year. Finally, the spectre of tariffs on drugs and pressure from the US administration to lower medicine prices weighed on the performance of pharmaceutical companies which otherwise had decent, though largely uninspiring, second-quarter results.
Fund performance
The Company’s NAV increased by 1.5% in July, ahead of its benchmark, the MSCI All Country World Daily Net Total Return Health Care Index, which was up 1.0% (both figures in sterling terms).
Positive contributors relative to the benchmark in July were Argenx, Merus and Avidity Biosciences.
Argenx reported overwhelmingly positive Q2 results, with its key asset beating consensus expectations substantially.
General strength in the biotechnology sector supported Merus and Avidity Biosciences during the month. Specifically for Merus, we think there was renewed interest and appreciation for its pipeline ahead of clinical data being presented at an upcoming medical conference. For Avidity Biosciences, not only did the company receive FDA Breakthrough Therapy Designation for one of its pipeline assets but there was also speculation that it could be an M&A target.
Negative relative contributors in the period under review were Johnson & Johnson*, Thermo Fisher Scientific and Intuitive Surgical.
A lack of exposure to Johnson & Johnson and, for the majority of the month, to Thermo Fisher Scientific was a detractor as both companies’ share price surged after reporting strong Q2 earnings. Finally, as mentioned above, July saw a rotation away from ‘crowded long’ stocks, such as Intuitive Surgical, which underperformed despite a solid Q2 set of results.
We added positions in Steris, Thermo Fisher Scientific, Apollo Hospitals Enterprise and Torrent Pharmaceuticals.
We took the opportunity of a derating in Steris, a medical equipment company specialising in sterilisation, to start a position in the company. We believe that its underlying market remains robust and that revenue growth can re-accelerate after a more subdued period.
After a challenging few years, Thermo Fisher Scientific reset its mid-term expectations during the second-quarter earnings call. We think the negative earnings revisions should start to bottom out and there is potential for upside if recent underlying industry trends continue to improve.
Apollo Hospitals Enterprise runs India’s largest for-profit private hospital network but also has a loss-making healthcare technology business. The company has initiated the process to separate this business, thereby simplifying its structure, which should narrow its large valuation discount to peers.
Finally, Torrent Pharmaceuticals is an Indian company that specialises in branded generics and other pharmaceuticals. Recently it has announced the intention to acquire its peer JB Chemicals & Pharmaceuticals in a deal that could yield ample cost and revenue synergies upon full integration and therefore be accretive not just to the topline but also to earnings.
The new positions were funded, in part, by the sale of ConvaTec Group, Terumo, Globus Medical, Novartis and Cardinal Health.
Outlook
As the relative discount of healthcare to the broader market keeps on widening, we remain steadfast in our conviction that now could be an interesting time for contrarian investors to revisit our sector. History shows that investing during periods of heightened policy uncertainty can generate strong returns. At the cost of repeating ourselves, all the ingredients for a healthcare rerating are there – demand for healthcare products and services is not diminishing, the industry’s innovation engine is running at full throttle and long-term growth drivers including expansion in emerging markets, preventative care, industry consolidation and improvements in access and affordability remain intact. We hope that, over time, as the dark clouds created by policy uncertainty begin to dissipate, healthcare’s robust fundamentals will be able to shine once more.
*not held
James Douglas
James studied medicinal chemistry and has worked in healthcare, in sales, research and fund management, throughout his career
Gareth Powell
Gareth worked at a pharmaceutical company and in academic laboratories before setting up the healthcare team in 2007
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