Fund Rationale: AB International Health Care Portfolio Fund

AB International Health Care Portfolio Fund (the “Fund”)
SGD Class A Accumulation Shares (ISIN: LU0289739699)
Fund Manager Page
Daily Price & Charts

Endowus has selected the Fund as it offers:

  • Quality-focused portfolio of high-conviction healthcare stocks that is diversified across sectors and geography;
  • Highly experienced team of investment professionals with more than 25 years of average experience, and specialising in healthcare investing;
  • Superior long-term risk-adjusted returns, backed by lower volatility compared to benchmark and peers; and
  • Retail share class with 100% trailer fee rebated back to Endowus investors to achieve lower cost of access.

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Key Information

Fund Objective: Seeks capital growth by investing primarily in equity securities of health care and healthcare-related companies located throughout the world, employing rigorous bottom-up research to identify companies with long-term growth potential in various market conditions and emphasising companies that are expected to attract health care spending, generally through the introduction of new treatments and therapies or by offering customers cost reduction opportunities.

Suitability: Investors who understand the risks of the Fund, possess basic investment knowledge and plan to invest for the medium to long term, want exposure to global equity markets through a specific segment of the economy, and have a high risk tolerance and can bear losses.

Cost: 

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  1. Total Fund-level Fees include fund management fee of 1.80%.
  2. This is a retail share class with 100% trailer fee rebated back to Endowus investors to lower the cost of access.
  3. Endowus does not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Access Fee.

Fund Characteristics

Fund Inception: 5 July 1995
Share Class Inception: 20 July 1983
Benchmark: MSCI World/Health Care

Fund AUM: SGD 2.91bn
Source: MorningStar as of 22 July 2021. Please refer to the FMC page for the most updated AUM.

Regional Allocation:
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Sector Allocation:
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Source: MorningStar as of 31 May 2021. Allocation data indicate actual exposure as a percentage of the Fund's total Net Asset Value. Please refer to the Fund Manager Page for the most updated information on Fund Holdings and Breakdown. 

Selection Criteria

Endowus has selected the AB International Healthcare Portfolio for its disciplined approach of constructing a portfolio of quality, high-conviction companies engaging in various healthcare sectors such as pharmaceuticals, healthcare equipment, biotechnology, healthcare services, and others. The investment process begins with a bottom-up assessment of companies in the investable universe, giving attention to signs of high quality and sustainable long-term growth such as strong cash flows, return on capital, management’s strategic focus on research, and positioning within the sector.

The team also considers ESG practices as part of the fundamental research, evaluating the companies based on healthcare-specific considerations such as good governance, security of patient data, waste management, and more. The resulting portfolio is a basket of high-conviction stocks, which is rather concentrated at 40 to 60 names, exhibiting higher-than-average quality tilt. Contrary to other healthcare peers which tend to display a chunky allocation to the US, the portfolio also displays a lower-than-average exposure to the US, and allocates a good balance to other geographies including Europe and Asia.

The Fund is managed by Lead PM Vinay Thapar, whose lifelong career of more than 20 years has been in healthcare investing, and supported by Co-PM John Fogarty, who used to be the previous Lead PM of the strategy and has almost 30 years of industry experience. The duo is supported by analysts specialising in the healthcare sector with an average experience of almost 20 years. What may strike an investor as unconventional is the fact that, unlike other peers that feature several PhD members in their investment teams, this Fund is run by a group of investment professionals without specific medical or scientific background -- we nevertheless take confidence in the team’s investment philosophy that healthcare investing can be approached from a fundamental, business perspective like investing in any other sectors. Thus far, this quality-driven strategy has demonstrated a proven and favourable track record since its inception in 1983.

The Fund has successfully delivered superior risk-adjusted returns over the long term compared to its peers, especially as it manages market volatility through a quality-driven portfolio. Investors may wish to note that, however, the same quality tilt has resulted in the portfolio underperforming relative to its peers during environments when growth stocks prevail, and given also the strategy’s specialised focus on the healthcare sector, this Fund should be used as a satellite allocation in tandem with a core portfolio.

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Updated by Endowus: July 2021

** Disclaimer: Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Any opinions expressed reflect a judgment at the original date of publication by us and are subject to change without notice.
The prospectus, profile statement, product highlight sheet, fund factsheet or other offer or product documents may contain references about the expected risk tolerance of their target investors. These are in no way indicative of how we at Endowus have assessed your risk tolerance based on your stated objectives and financial situation. Endowus accepts no responsibility for investment decisions made in response to the expected risk tolerance levels mentioned in the product or offer documents.