Fondita Healthcare was launched a year ago and has had a successful year. The fund’s return has been 9.3 % since launch (as of 14.6.2019). Considering that the market had a rough period last fall, we can conclude that the beginning of 2019 has been far more successful. This year, the fund’s return has been 22.8 % and it has also outperformed similar funds available on the market (Rahastoraportti 5/19).
It has been pleasing to follow how the fund’s long-term drivers have worked out and in combination with successful stock-picking we see a positive result.
A general rule of thumb is that the healthcare sector increases twice as much as the global growth rate, which is approximately an annual growth rate of 6-7 % (source: Berenberg). The major drivers for growth are found in 1) an aging population, that need more drugs and healthcare products to a greater extent, 2) increased global welfare, which means that more people can afford to buy health care products and in 3) technological development, where the quality of the products constantly improves and reach an increasing number of new users.
The best contributor since the fund was launched is the German company Carl Zeiss. The company manufactures various instruments for curing eye diseases and for vision improvement. The company benefits from the increased number of eye surgeries performed all over the world. For example, the eye disease cataract is a very common disease that needs to be treated in order to minimize the patient’s risk of blindness. By surgically replacing the lens the patient can both get rid of his glasses and prevent cataract from developing again, which increases the quality of life significantly.
Another company that has been very strong during the year is the American company Dentsply Sirona. The company manufactures various dental equipment products and benefits from the increased demand for dental hygiene, dental surgery and dental care in general. Particularly, the need for dental care is massive in the developing countries.
Fondita Healthcare invests in companies whose activities promote health and wellbeing. The Healthcare sector is showing strong growth over the long-term and thus provides a good return for its investors. We are continuously looking for interesting companies for the long-term that meet our criteria.