Fund Profile


Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Bellevue Healthcare. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

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On 01/03/2022 BB Healthcare announced its corporate name change to Bellevue Healthcare Trust plc, with immediate effect.

Click here to read the RNS announcement

BB Healthcare (BBH) trust is a differentiated specialist trust, with many best-in-class features, that offers exposure to a secular growth theme. At the same time, in certain circumstances healthcare may provide a measure of defensiveness during a prolonged recession. Taken together, this means the portfolio may provide a complimentary exposure to other healthcare, or growth-focussed trusts or funds.

The managers (Paul Major and Brett Darke) invest in a concentrated portfolio of companies providing innovative ways to transform what the managers view as a fundamentally broken global healthcare system. That said, when evaluating investments, the managers are valuation aware. Market dynamics over recent months have meant that many cutting-edge small and mid-cap companies that have traditionally been too expensive for the team to consider, are now at more reasonable valuations allowing Paul and Brett to buy into them. As a result, the portfolio has rarely been better exposed to higher quality or more transformational science and the managers are genuinely excited about the opportunity for these companies.

Over the short term, relative performance has lagged. However, over the long term, the NAV performance has been strong and BBH has consistently outperformed the benchmark and its peer group as well as delivering good returns in absolute terms. BBH exhibits higher historic volatility than peers and the benchmark owing to the managers’ highly active approach, but the risk adjusted returns show the managers are adding value for this increased volatility with a class-leading sharpe ratio.

BBH targets a dividend payout equal to 3.5% of the prior financial-year-end NAV. This dividend is funded from capital reserves, and the current target of 6.03p equates to a dividend yield of 3.1%.

Analyst's View

BBH has many best-in-class features including low discount volatility, high dividend security and a simple and transparent fee structure. It also offers access to a specialist team in an area of the market that is innovating rapidly, which offers the potential for very attractive multi-year returns.

Historic returns since launch have been strong relative to peers and the benchmark, but investors need to be aware that the NAV has also demonstrated higher volatility than the market, making it likely best suited to those looking to the long term. The managers are very clear that they invest in a rolling three-year view. Over the short-term performance has lagged the benchmark. In our view, there is nothing to suggest that the managers’ investment process is not repeatable, and so this could be an interesting juncture if investors believe that their pattern of outperformance will revert, as has happened after prior periods of underperformance (e.g. Q4 18, Q2 20).

Certainly, the same factors that have led to BBH’s underperformance have enabled the managers to invest in high growth companies at less demanding valuations. When we caught up with the managers recently, they were audibly excited about the opportunities, commenting that the portfolio has never been better exposed to higher quality or more transformational science. In our view, the characteristics of the trust make it a strong potential option for exposure to the healthcare sector. As we discuss in the Dividend section, the trust also pays a significant income (from capital), which means it offers diversification for income investors too.

Bull bear
Very differentiated offering, with highly active approach Narrow focus, and concentrated portfolio presents risks relative to more diversified portfolio
Excellent long-term track record Dividend based on NAV, which means that if the NAV falls year on year, it could mean a decline (although the board could choose not to pay a lower dividend)
Attractive dividend yield (albeit paid from capital) Potential to gear, combined with concentrated portfolio, can translate into high NAV volatility


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Fund History

26 Jun 2024 Kings for a day
As Britain heads to the polls, our analysts imagine what they'd do given a chance to implement economic reform…
28 Mar 2024 Healthcare, UK valuations, and renewables
We take a look back at the final week of our ISA event…
21 Mar 2024 Fund Analysis
BBH could be poised for strong performance as the rate cycle eases…
20 Mar 2024 How to grow old gracefully (and preferably rich)...
Ahead of the final week of our event, focused on retirement planning, we consider some of the complexities of portfolio construction…
05 Mar 2024 Results analysis: Bellevue Healthcare
Reviewing a tough financial year, but the last three months give grounds for optimism...
23 Feb 2024 An underrated edge
Company meetings give managers a level of access that is difficult for individual investors to obtain…
20 Feb 2024 Waiting for the world to change
Closed-ended trusts are a simple way to access the attractive income and defensive potential of renewables infrastructure…
25 Mar 2024 Bellevue Healthcare
Paul Major
Rewatch this webinar as part of our month-long online series 'Themes for your ISA in 2024' hosted by the team at Kepler Trust Intelligence throughout March...
Watch Recording
26 Jan 2024 Heading to the polls
We look at elections around the world and what they mean for investors…
03 Jan 2024 Probably better asking an octopus
Our investment trust experts uncurl a tentacle each and choose their ‘top picks’ for 2024…
15 Dec 2023 Do obesity drugs have short legs?
BBH’s portfolio seems to offer stronger fundamentals than the hype elsewhere would suggest…
18 Oct 2023 Computer says no
Markets are fixated on replacing humans with AI, rather than maintaining them with biotech. Could this be an opportunity to rotate profits?
29 Sep 2023 Healthy fundamentals
Healthcare and biotech are out of favour despite the secular growth trends supporting them…
15 Sep 2023 Pizza Tiger
You don’t need to reinvent the wheel to deliver good returns on your investment...
23 Aug 2023 Halfway there…investing on a prayer
We provide an update on our picks for 2023 and see which analysts' prayers are being answered…
04 Aug 2023 Not going away
Macro volatility won’t change a key long-term driver for Bellevue Healthcare...
20 Jul 2023 Video interview with BBH Manager Paul Major on M&A, buy opportunities and more
We look at whether 2023 is still a 'historic opportunity' to invest in healthcare...
30 Jun 2023 Fund Analysis
BBH offers a very differentiated way to invest in the bombed-out healthcare sector…
05 May 2023 Is it time to buy healthcare?
Macro fears seem to have crimped valuations, despite the sector’s long-term growth prospects…
06 Mar 2023 Results analysis: Bellevue Healthcare
A rare discount may prove interesting to long-term investors in BBH…
20 Feb 2023 Podcast: Trust Issues #11 - Why healthcare valuations are low
We speak to Bellevue Healthcare manager Brett Darke about the state of the healthcare sector...
04 Jan 2023 Here we go again
We review our ‘top picks’ for what was a wild year and place our bets for the year ahead – which doesn’t look much calmer…
09 Dec 2022 Why healthcare stocks are here to stay
It’s been a volatile couple of years but that looks unlikely to stop tailwinds boosting the sector…
10 Nov 2022 Fund Analysis
BBH is resolutely aligned to the long-term growth tailwind of healthcare demand…
12 Jul 2022 Results analysis: Bellevue Healthcare
BBH’s managers appear resolute in their conviction, despite a challenging period for performance…
28 Jun 2022 Podcast: 2022's historic opportunities for healthcare investors
We speak to Paul Major, Portfolio Manager of Bellevue Healthcare...
14 Apr 2022 The inevitabilities: death and taxes
Biotech has had a rough ride lately but, as the world gets older and richer, our analysts think long-term secular growth is inevitable…
30 Mar 2022 You say tomato…
Do it yourself or put it into a global fund and leave it to the experts - our analyst debate the merits of each approach...
25 Mar 2022 Slides and Audio: BB Healthcare
Download the presentation and listen to the audio from our 'Ideas for your ISA' virtual Spring event on 17 March...
23 Mar 2022 Fifteen ideas for your ISA
Slides and audio from our event last week, featuring fund managers running money in every major market in the world...
07 Mar 2022 Fund Analysis
BBH’s discount has widened, and the managers' increased gearing shows their confidence in prospects…
01 Mar 2022 Results analysis: BB Healthcare
The team behind BBH are bullish on the long-term outlook and gearing up after big falls in share prices among healthcare stocks…
22 Feb 2022 Gearing up for recovery
The team at BB Healthcare think the continuing market rout for growth equities has created a fantastic opportunity for investors brave enough to weather the ongoing storm…
24 Dec 2021 Short term pain, long term gain
The team behind BB Healthcare Trust think the chaos being caused by the Omicron variant could create opportunities for long term investors…
10 Nov 2021 Fantastic growth funds (and where to find them)
We found them in India, Japan, frontier markets, healthcare and the global sector – and here they are…
10 Nov 2021 Slides and Audio: BB Healthcare
Download the presentation and listen to the audio from our 'Fantastic growth funds (and where to find them)' conference on 4 November...
01 Oct 2021 Things can only get better (and they will)
The team at BB Healthcare see brighter days ahead despite the best efforts of a sensationalist media to make it feel like doomsday…
09 Sep 2021 Fund Analysis
“Rarely better exposed to higher quality or more transformational science”...
30 Jun 2021 The long (and short) of future healthcare
We examine the implications of demographic change for investors...
07 Apr 2021 Paging Dr Alpha
The pandemic has boosted secular growth drivers behind healthcare as an investment theme...
10 Mar 2021 Spring Conference '21
Audio and presentations from 21 of the UK’s leading investment trust managers…
04 Mar 2021 Slides and Audio: BB Healthcare Trust
Download the presentation and listen to the audio from our 'Ideas for your ISA' Spring Conference on 03 March...
02 Mar 2021 Results analysis: BB Healthcare Trust
After another set of strong results, we look at how BBH has positioned itself for another year of outperformance…
10 Feb 2021 Fund Analysis
BBH is a potentially interesting addition to growth portfolios and for investors looking for income...
09 Jul 2020 The next big thing: two mega-trends that everyone should own
Tech seems to beat every other sector hands down – in both up and down markets – but nothing lasts forever. Where else should investors be looking for secular growth themes?
17 Jun 2020 Fund Analysis
BBH has a differentiated approach to a secular-growth theme...
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