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BB Healthcare Trust into FTSE 250 as portfolio proves its worth

Snapshot

  • Invests in healthcare stocks around the world
  • Mainly invests in small- and mid-caps
  • Recently promoted to FTSE250
BB Healthcare Trust PLC -

Quick facts: BB Healthcare Trust PLC

Price: 171.5 GBX

LSE:BBH
Market: LSE
Market Cap: £8.37 m
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What it does

BB Healthcare Trust PLC (LON:BBH) is a healthcare trust focused on global healthcare equities. It is run by the management team behind the successful BB Biotech Investment Trust.

The fund invests in a maximum of 35 companies at any one time, and there are no restrictions on geographies, market cap or sub-sector.

Although there are no restrictions on geography, the bulk of BB’s investments are in the US, which is perhaps unsurprising given that the US is home to the world’s biggest pharma market by quite some way.

The firm was promoted to the FTSE 250 in June's quarterly reshuffle.

In its October update, BB said: "The Trust’s Net Asset Value was 163.4p at end October outperforming the sector benchmark by 381bp (basis points).

"This was a very tricky month with high levels of intra-day volatility and we again benefitted from our intentionally defensive positioning," said the manager.

“Tools, Services and Diagnostics were again the principle drivers of our outperformance and therapeutics were the largest detractors.

“As noted previously, we still see scope for a post-election relief rally in the Therapeutics companies.”

What the boss says: Paul Major and Brett Darke, investment managers

"As we have noted in previous factsheets, we think a Democratic White House and Congress is the best medium-term outcome for the healthcare sector more broadly.

"One cannot divorce the potential election outcome from the wider economic picture, which looks set to worsen.

"For the majority of US citizens, employment status and healthcare access are intrinsically linked. The costs of the US system are such that those without adequate insurance coverage will forego non-emergency care."

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What the broker says: Peel Hunt

“Healthcare has historically been a valuable source of equity income for investors. However, this can be at the expense of capital growth. BB Healthcare Trust (LON:BBH) pays its dividend out of capital. The benefit of this approach is that it allows the managers to adopt an unconstrained and high conviction approach, without being tied to the high-yielding, often ex-growth stocks in their universe.”

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