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Global healthcare equity funds see over Bt1 billion in investment


More than Bt1 billion flowed into global healthcare equity funds as they gained positive sentiment from news of a Covid-19 vaccine.

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From the beginning of this year to September 7, the returns of global healthcare equity funds, such as MSCI World Pharmaceuticals, was 0.04 per cent, Nasdaq Biotechnology 6.17 per cent, MSCI World Healthcare Providers & Services -2.13 per cent, and MSCI World Healthcare Equipment & Supplies 8.83 per cent.

Fund managers have had a positive view of healthcare stocks as these gained positive sentiment from research and development of medicines and vaccines and the US health welfare scheme.

According to Morningstar Research, Bt1.1 billion flowed into global healthcare equity funds. Their net asset value in the past eight years was Bt30 billion, up 11 per cent compared to the end of the previous year from a cumulative average return of 8.2 per cent.

Morningstar Research senior analyst Chayanee Juengmanon said the price of healthcare stocks was currently high, but she advised investors to pay attention to diversifying risks because the returns of funds focus on investing in one industry and may fluctuate more than others.

Tisco Asset Management director of marketing and investment adviser Sarat Chatsuwan said global healthcare stocks would grow further for another 5-10 years, taking into account research and development to cure various diseases, an ageing society, and healthcare trends.

“If medicines and vaccines by healthcare companies are approved by the US Food and Drug Administration, their share prices will rise sharply. And these would rise further if the firms were taken over by bigger healthcare companies,” he said. “Also, the price of healthcare stocks are cheaper than technology stocks.”

Sarat explained that stocks in the healthcare group consist of biotechnology companies that conduct research and development of medicines and vaccines, and healthcare facilities and services companies that provide medical services, such as telemedicine.

Even if the price of healthcare stocks was high compared to others and these face mass sell-offs for profit, he recommended investors buy these shares and advised them to diversify 50 per cent of investment for long-term speculation and another 50 per cent to gain profit.

Published : October 07, 2020

By : The Nation