Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) has announced the launch of Affin Hwang World Series – Global Healthscience Fund (“the Fund”).
The Fund is a wholesale feeder growth fund that provides access to broad opportunities in healthcare by investing in a collective investment scheme, namely BlackRock Global Funds World Healthscience Fund (“Target Fund”).
The Target Fund is a Luxembourg-domiciled fund managed by BlackRock (“Target Fund Manager”). To achieve its investment objective, the Fund will invest a minimum of 80% of the Fund’s net asset value (NAV) into the Target Fund and a maximum of 20% of the Fund’s NAV into money market instruments, deposits and/or liquid assets.
Affin Hwang AM Chief Marketing & Distribution Officer Chan Ai Mei said, “Quality is key as markets approach a late-cycle environment. With global growth rates likely to have peaked in this current cycle, the healthcare sector provides investors a defensive shelter to weather against volatility and also tactically diversify.
“Historically, the healthcare sector has shown a low sensitivity to global growth displaying resilient earnings in a mature market cycle.”
Continued Chan, “Underpinned by positive demographic and innovation trends, we see secular growth drivers that would continue to drive healthcare demand irrespective of seasonal or cyclical trends in the macro/market landscape.
“Given the sector’s late-cycle potential to outperform, we believe the Fund would complement our existing product suite to meet the needs of our clients to build resilience in their portfolio and smoothen out returns.”
Looking at the historical analysis of sector performance through market cycles in the past 25 years, healthcare has consistently outperformed other sectors during late cycle and recessionary periods.
For example, the healthcare sector has on average outperformed by +7.0% during late cycle periods relative to broad equity markets. The analysis also concluded that the healthcare sector has displayed the least sensitivity to global growth historically.
The sector displayed the lowest beta (4.3) versus the quarterly change in real GDP since 1995, compared with a median of 7.7 across the remaining Global Industry Classification Standard (GICS) sectors.
On outlook for the healthcare sector, Erin Xie, PhD, BlackRock’s portfolio manager of health science equity said, “We believe that the current environment provides an attractive entry point for the healthcare sector, especially given where we are in the business cycle today.
“It is also important to note that on a valuation basis, the sector continues to look attractive versus broader equity markets and relative to the sector’s long-run average on a forward-looking price-to-earnings basis. Our strategy continues to be a diversified, all-weather healthcare strategy that centres around the investment team’s bottom-up, fundamental investment process.”
She also cited continuous innovation within the healthcare space as an additional source of tailwind that would bode well for the sector’s outlook. “Aside from robotic surgery and new drug discovery, we continue to see broad opportunities in the healthcare industry with numerous companies developing innovative products in an effort to improve their growth profile.
“In addition to the innovation in medical devices, we have seen the development of pioneering surgical methods, which lessens the invasive nature of surgery and ultimately improves the overall patient experience and reduces recovery time. The regulatory environment for these innovative devices has also been improving, with approval rates accelerating and duration to receive approval reducing,” said Dr Xie.
The Fund is available to Sophisticated Investors who seek capital appreciation, have a long-term investment horizon and a high risk tolerance. The Base Currency of the Fund is in USD.
The Fund is offered in five (5) currency classes, namely USD Class, MYR Class, MYR-Hedged Class, SGD-Hedged Class and AUD Hedged-Class. The minimum investment amount is $5,000 for all listed currency classes.