During the Corona Crisis Arctic’s health care fund Arctic Aurora LifeScience has had a solid performance, despite the turbulent markets. The fund has held up better than the general market. The portfolio composition with defensive large pharma companies in a combination with data driven biotech stocks has been working out well. In the linked video presentation, Ulrica Bjerke discusses the defensive properties of the health care sector in general, and how the biopharma sector has performed during historical crisis the last two decades. Thanks to its acyclical growth drivers the sector shows a clear outperformance during difficult times and uncertain markets.
The different sub sectors of biopharma have outperformed the general market year to date. So far this year and this crisis, the same pattern is seen, the large pharma companies have come with strong interims for Q1 and in largely reiterates the guidance. At the same time, the fund’s biotech companies that succeed with positive clinical data get rewarded significantly. The large biotech companies Gilead and Regeneron have had a very strong performance based on them leading the development of new treatments to fight the COVID 19.
In light of the market uncertainty going forward, it is our conviction that the fund’s composition with a mix of defensive large pharma with good earnings visibility, strong big biotechs and innovative SMID cap biotechs is, in our view, an optimal balanced way of investing in defensives and at the same time disruptive innovations going forward.
In the attached link to a recorded presentation on YouTube, CIO of Arctic Aurora LifeScience Ulrica Slane Bjerke shares her insights as a longstanding investor in the pharmaceutical and biotech sector. She addresses these questions:
- How has the fund performed during the Pandemic crisis?
- What has been the value driver behind the performance?
- Is healthcare that defensive sector it is said to be?
- What’s the impact of this crisis? What can we expect this time? Is biotech different?
- How is the fund positioned in light of current economic crisis?
- Is valuation still attractive?
- What will drive return and value of the fund going forward?
The presentation she is going through is attached as a pdf-file. We hope you find this update interesting and please do not hesitate to contact us if you want additional information of the fund.