DNB Asset Management, the subsidiary of Oslo listed DNB Holdings, one of the Nordic region’s biggest financial services providers, has moved to offer greater investor access to its DNB Fund – Health Care fund by offering it in Germany, Austria, Switzerland, Spain and Finland via its Luxembourg platform.
The fund forms part of DNB’s sector focused funds, which look to technology, renewable energy and Nordic assets (see below). The fund has previously averaged close to 14% growth annually for the past decade, for retail and institutional investors in Norway and Sweden. It has been managed by Eirik Hernes Larsen since 2012, and assisted by Knut Bakkemyr since 2017 and by Benedicte Bakke since 2018.
The central theme of the strategy is that the global healthcare industry is growing steadily, but with valuations below the long-term average there are opportunities for active investors in the sector. Demographic changes globally are one factor behind the forecast growth in demand for healthcare. Average earnings in the sector are growing at 9% annually, close to twice the 5% rate achieved by the broader market DNB notes.
In the crucial US healthcare market, fiscal changes and market consolidation will drive returns in the face of ongoing pressure to lower prices on medicines. Still, the investment universe is broad, some 3,000 companies, according to DNB, with the fund’s management team focused on analysis models for some 150 companies.
As a concentrated portfolio, the fund currently holds some 34 stocks, with the top 10 holdings accounting for half the assets invested. The pharmaceuticals and healthcare services areas account for 43% and 38% respectively of the portfolios. Other key sub-sectors include medical devices, biotech, generic medicines and IT. Geographically, the fund is split 70% US, 25% Europe and 2.5% Latin America.
DNB has been a constant participant in the Nordic Investment Managers Forum (NIMF), which has taken place in Luxembourg annually in recent years.
Most recently, DNB Fund – Technology portfolio manager Anders Tandberg-Johansen explained his approach to the sector: http://nimf.lu/presentations/2017/2017_NIMF_DNB.pdf
Further details are available via www.nimf.lu