Worldwide Healthcare Trust: August 2022 update Leave a comment

  • The trust is managed by one of the most experienced teams in the healthcare sector
  • Following a strong period of performance, the last 12 months have been difficult for the trust
  • It has increased the dividend per share from 22p to 26.5p. Though yields and income aren’t guaranteed and can change over time

How it fits in a portfolio

Worldwide Healthcare Trust aims to grow your money over the long term by investing in healthcare companies across the globe, including pharmaceutical and biotechnology companies. Investing in the trust could help boost long-term growth potential but this is a specialist area so adds risk. We think funds and investment trusts investing in a specific sector should usually only form a small part of a well-diversified investment portfolio.

When investing in closed-ended funds you should be aware the trust can trade at a discount or premium to net asset value (NAV).


Worldwide Healthcare Trust has been managed by OrbiMed, a healthcare investment company, since it launched in 1995. OrbiMed founder and managing partner Sven Borho and co-partner Trevor Polischuk are currently the trust’s lead managers.

Both managers have the support of OrbiMed’s investment team, which currently has over 100 employees worldwide covering a range of aspects from operational support to research and compliance.

Around 80 members on the team are focused on investment, with a total of 30 members dedicated to Worldwide Healthcare Trust. The managers also benefit from the expertise of OrbiMed’s private equity team, which looks at companies that aren’t yet listed on the public stock market.

Having the ability to draw on the resources of the investment team is crucial for Borho and Polischuk, as it can help provide fresh investment ideas, but also further enhance the level of research and analysis on each company or sub-sector within healthcare. Though, they make the final decision when it comes to an investment.


Healthcare companies are subject to a variety of events which can impact success, ranging from the outcome of a clinical trial or merger, to regulatory changes like drug pricing or new product launches. These factors can impact a company share price quickly and add to volatility, so the team ensures the trust is well-diversified and that they only invest in companies they feel are high quality.

The managers look for companies they feel offer strong long-term growth potential. They should be financially strong, have underappreciated products in development or a high-quality management team. These can be found in both higher-risk early-stage companies and larger, more established firms worldwide. The managers also have the ability to invest in some higher risk smaller companies.

Over 70% of the trust is invested in North America, with the rest spread across Europe and parts of Asia, including Japan and some higher-risk emerging markets like India and China. The managers continue to find investment opportunities across these regions and are particularly excited about healthcare innovation.

New technology advancements, as well as accelerated drug discoveries and cures, are opening doors of opportunity. The managers have invested in companies that could benefit from innovation, such as emerging biotechnology.

A portion of the trust is also invested in unquoted companies – companies that are not currently listed on the stock market. These companies are higher risk as they tend to be more difficult to buy and sell than listed shares.

During the trust’s financial year (12 months to the end of March 2022), four new unquoted companies were added, increasing the total to around 7% of the trust. These are all located in emerging markets: three in China and one in India. The three Chinese additions included dental clinic Arrail Group, medicine platform Dingdang Health Technology and medical imagery operator RiMag. The addition from India is API Holdings, whose parent company is online pharmacy giant PharmEasy.

The managers also have the flexibility to invest in derivatives (ability to borrow to invest), which if used, increases risk.


OrbiMed was founded in 1989 and has become one of the world’s largest investment companies specialising in the healthcare sector. Their offices span three continents and, given their focus on a single sector, they strive to become true experts in their field.

The company employed over 25 new people between 2021-22 to expand the team’s expertise and resources. They now have over 100 employees globally, with more than 30 members holding doctorates in medicine and philosophy. They meet regularly, freely sharing their opinions, information and ideas.

ESG Integration

Environmental, Social and Governance (ESG) factors have become an increasingly prominent focus. The managers believe there’s harmony between companies that act responsibly and those that can succeed in the long run. As a result, OrbiMed conducts a negative screening of potential sectors or companies that may harm public health or wellbeing.

Evaluating a company’s performance based on ESG concerns or strengths provides guidance to the team when making potential investment decisions. Though ESG factors aren’t the sole consideration when making an investment decision.

ESG scores from external parties are used by the managers to help evaluate healthcare companies. To ensure robustness they also assign their own research and scores to companies. A part of this includes company engagement, where the team encourages them to have positive governance practices or achieve their climate targets.


The ongoing annual charge over the trust’s financial year to 31 March 2022 was 1.40%, which includes the trust’s performance fee. This is an increase from last year’s charge of 0.90% but this figure didn’t include a performance fee.

Investors should refer to the latest annual report and accounts, and Key Information Document for details of the risks and charging structure. If held in a SIPP or ISA the HL platform charge of 0.45% (capped at £200 for a SIPP and £45 for an ISA) per annum also applies. Our platform charge doesn’t apply if held in a Fund and Share Account.


The trust’s long-term performance has been strong*, outperforming the global healthcare index since it launched in 1995. Remember, investments can go down as well as up in value, so and you could get back less than you invest.

More recent performance has been mixed though. The trust experienced an exceptional period of performance between March 2020 to March 2021, aided by the managers’ investments in biotechnology companies. But the last 12 months have not been so strong.

The trust fell 7.81% compared to an average return of -5.63% for healthcare investment trusts. Over the same period, the trust’s net asset value (NAV) fell 5.15%. Past performance isn’t a guide to future returns.

A large driver behind this has been the biotechnology sector, which is currently going through one of its toughest periods in history. The managers tend to invest more in this area compared to the market, and two of the trust’s worst performing companies, Mirati Therapeutics and Deciphera Pharmaceuticals, fall within the biotechnology sector.

The managers still believe this is an area full of innovative companies with good growth potential, so remain positive with the longer-term prospects.

Alongside this, some wider market events have put pressure on the trust. We’ve seen a sharp rotation away from growth investing, which focuses on investing in companies capable of generating above-average earnings growth over the long term. The growthier healthcare investments, including the more innovative, tech-based companies, were hit hard by the rotation.

Rising interest rates have also caused the trust to struggle. The expected cashflows of the more growth focused companies, which are often far out into the future, are worth less today so they have lost some of their appeal.

Despite this, some of the more defensive pharmaceuticals companies, which tend to do well in periods of uncertainty, have fared well, including drug manufacturers AbbVie and AstraZeneca. Some of the managers’ investments in Japanese and Indian healthcare companies also held up well.

This is a reminder that specialist sectors like healthcare can be volatile and naturally come with more risk, so investments can fall and rise very quickly. Periods of volatility are expected and we think it should usually only form a small part of a well-diversified investment portfolio, focused on the long term.

Annual percentage growth
July 17 –
July 18
July 18 –
July 19
July 19 –
July 20
July 20 –
July 21
July 21 –
July 22
Worldwide Healthcare Trust 11.54% 3.41% 20.13% 10.83% -7.81%
FTSE World/Health Care 13.67% 10.13% 12.08% 14.91% 10.00%
AIC Investment Trust – Biotechnology & Healthcare 12.82% 4.06% 18.92% 7.00% -5.63%

Past performance is not a guide to the future Source: *Lipper IM to 31/07/2022.

Find out more about Worldwide healthcare trust, including charges

Worldwide Healthcare Trust Key Information Document

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