Two funds that have performed well in this sector are the AXA Framlington Healthcare fund and Polar Capital Healthcare fund. Both funds are set to once again deliver investors with a positive return for 2014 and make it five consecutive years of positive returns.
AXA Framlington Health
The AXA Framlington Healthcare fund underwent a change of management in the middle of the year and is now managed by Mark Hargraves.
The fund has provided investors with access to a broad breadth of investments, with the top ten holdings including a number of true giants and leaders from within the sector.
Investors receive diversification within the holdings, with the investment focus split across themes such as healthcare services, pharmaceuticals, devices, biotech and speciality within pharma.
Performance of fund vs index over manager tenure
Source: FE Analytics
Polar Capital Healthcare Opportunities
The Polar Capital Healthcare fund is co-managed by Dan Mahony and Gareth Powell, whose team has over 60 years industry experience.
Key investments currently focus on themes around healthcare equipment, biotechnology and pharmaceuticals.
In terms of geographical exposure, whilst the fund does provide some global exposure, the fund does have a strong bias towards the US due to the dominance of many of the companies within this sector.
We believe that the advances in medical and healthcare technology will continue at a rapid pace due to ageing populations, obesity and the demand and rising wealth of the emerging economies.
Business models are likely to become more focussed on specialist niche areas either directly or through partnerships and acquisitions.
Revolutionary developments within immunodiagnostics are aiding drug development and treatments that harness the body’s own immune system. These developments will undoubtedly become the norm.
Performance of fund vs index since launch
Source: FE Analytics
CF Miton UK Value Opportunities
The CF Miton UK Value Opportunities fund has a management team that is likely to have slipped under the radar given the fund’s short investment history.
However, the managers George Godber and Georgina Hamilton have proven within that timeframe to demonstrate their stock picking ability.
They seek to identify companies which they believe are trading at a significant discount to their intrinsic value through a robust bottom up stock selection policy.
There are a number of funds that strive to achieve the mantra of a deep value strategy and the approach this fund is definitely does that.
This fund only launched back in March 2013, however performance in 2014 to date has been positive, with a return of 7.64 per cent, in a year where markets have generally traded sideways.
In terms of underlying investments, the fund currently has a bias towards mid and small cap companies, along with those residing on AIM.
Performance of fund vs sector since launch
Source: FE Analytics
Whilst past performance is no guarantee to the future, we believe both the sector themes and deep value approach to investing are opportunities going forward throughout 2015 and beyond.
Andy Parsons is head of investment research at The Share Centre. The views expressed are his own.
