While many point to the recovery in the US economy as one of the main reasons to be optimistic at present, Isaly believes all this could be in vain given the president's plans if he is re-elected. The US Supreme Court upheld the main features of Obama’s flagship law last month and attention will now turn to the elections later this year when Republicans will hope to win back the presidency and repeal the legislation.
"The Supreme Court upholding what is effectively a public healthcare system in the US will bankrupt healthcare and possibly the United States," Isaly said.
"A Mitt Romney victory in the elections later this year would certainly be better for our company."
"In any case, we can escape to China or India if the Supreme Court and the president make life difficult for us."
The trust has a 51 per cent exposure to the US, where the healthcare reforms have caused an ideological political battle.
However, the manager says he is increasing his focus on emerging markets to maintain the trust’s strong performance.
According to FE data, the Worldwide Healthcare Trust has returned 837.99 per cent since its launch in 1995. It has delivered 182.54 per cent over 10 years and 82.71 per cent over five.
Performance of trust since launch
Source: FE Analytics
Isaly says a boom in demand for medicines in emerging markets will mean the Worldwide Healthcare Trust can maintain its performance, but calculates its current exposure to those countries as only 13 per cent.
India and China each account for around 20 per cent of the world’s population, but only around 4 per cent of drug spending, a disparity that Isaly believes will close, bringing with it opportunities for his trust.
According to the manager, only about 30 per cent of top-10 holding Sanofi’s sales come from emerging markets and the figure is even lower for other companies.
"We need the ability to invest directly given the low proportion of big pharma held in emerging markets. Developing countries will spend more and we want to be there," he said.
Multinational drug companies are struggling at the moment with the expiry of some of their most profitable patents – referred to as the "patent cliff" in the industry – but Isaly thinks the largest firms are ready with new products that have huge sales potential.
"There have been 10 years without much innovation, but we believe there will be an acceleration of new products and approvals," he said.
Pfizer, previously famous for developing Viagra, has filed a patent for a pill that treats arthritis. This would take the place of the more unpleasant injectable treatments often used and would, in Isaly’s calculation, have a sales potential of $5bn worldwide.
The US Food and Drug Administration is also expected to approve a weight-loss drug patent filed by Vivus that Isaly thinks could make $1.5bn in global sales.
As well as driving the trust to look for opportunities in emerging markets, macro-economic factors also determine which stocks it avoids.
"We are avoiding medical device manufacturers, who tend to be very exposed to the economic crisis in southern Europe," Isaly explained.
The fund has a low turnover, making trades at the rate of one a month, and has only 64 holdings in total – including some more exotic stocks.
"We are invested in traditional Chinese medicine, which works as an over-the-counter medicine without prescription," said Isaly.
"The Chinese believe in it and they buy it," he finished.