Fund Profile

Disclaimer

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.

Overview
BBH looks set for a recovery as interest rates fall…
Overview

Bellevue Healthcare (BBH) is designed to capture the best earnings growth potential in the long-term secular uptrend in healthcare demand and sophistication. Managers Paul Major and Brett Darke look to identify companies that are operationally geared to new developments and trends, specifically those companies that are providing solutions to the challenges faced by modern healthcare systems.

The portfolio is a concentrated, high-conviction proposition with a strong bias to mid-caps. This area of the market has been out of favour in the past couple of years as investors have preferred the safety of large caps, but the imminent rate-cutting cycle looks like it may be the signal for a change in fortunes. BBH’s relative Performance has been strong in recent months, while Paul and Brett report market behaviour is increasingly promising, with their portfolio quickly being bought on any down-day, in contrast to what was happening in 2022 and 2023. The managers say they are more optimistic about the immediate prospects for their portfolio than they have been for quite some time.

BBH shares look good value on a Discount of 8.8% at the time of writing, when comparing the rating to its five-year history. The rate-cutting cycle could see this discount look increasingly attractive, in our view, while the board has been very active with buybacks to support the rating and NAV per share and there is an annual redemption facility too.

The trust pays a dividend worth 3.5% of the NAV from capital, based on the NAV at the previous fiscal year’s end.

Analyst's View

We think healthcare is a sector that should be highly attractive to investors seeking long-term growth. The structural drivers are clear: growing demand thanks to ageing populations, rising wealth, and supply-side advancements (better treatments becoming available). To this visibility must be added resilience: spending on healthcare is generally non-cyclical and so earnings streams should be consistent throughout the economic cycle.

BBH has the potential to maximise gains from these growth drivers, with the active, concentrated portfolio and a strong bias towards small and mid-caps. Stock selection is focussed on finding those companies most geared to the structural developments being forced on modern healthcare systems, meaning earnings growth potential could be magnified.

The shares currently trade on a c. 9% discount to NAV, which we find compelling. This is particularly so considering a US rate-cutting cycle now seems finally underway, which could boost the valuations of the high-growth stocks BBH holds. The portfolio saw a bounce in performance late last year when consensus formed that the interest rate cycle had peaked, and we think there is the potential for its areas of focus to come back into favour now the cuts have begun.

Bull

  • High-growth potential with rate cuts potentially set to boost portfolio
  • Specialist managers with long experience in the sector
  • Strong commitment to managing the discount

Bear

  • An active approach increases the potential for underperformance as well as overperformance
  • Gearing increases downside risks as well as return potential
  • Focus on a single sector and dominance by one country (the US) brings specific risks
Continue to Portfolio

Fund History

08 Nov 2024 Monthly roundup: the budget’s impact, DGN's strategic review and our podcasts & results highlights
Jo and Ryan discuss the latest news, reviews and interviews in the investment trust world...
04 Nov 2024 Trust Issues: the future of weight-loss drugs with BBH portfolio manager Paul Major
Paul Major talks us through BBH’s exposure to weight-loss drugs…
26 Sep 2024 Fund Analysis
BBH looks set for a recovery as interest rates fall…
23 Sep 2024 Changing of the guard
BBH’s combination of offensive and defensive qualities looks attractive…
31 Aug 2024 Don’t look back in anger
US equities are worth rolling with, but the market is broadening…
28 Aug 2024 Dream team
Our analysts review how their fund picks for 2024 have done…
06 Aug 2024 Trusts in Focus: Bellevue Healthcare
We give you the lowdown on healthcare specialist BBH...
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...
View all

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