The HSBC GIF Global Equity Sustainable Healthcare fund, which is aligned with UN SDG Goal 3, Good Health & Wellbeing, aims to address the challenge of making healthcare accessible amid growing medical costs.
The fund will be fully ESG integrated and invest in a range of 35 to 40 companies with a bias towards mid caps, long-term engagement, low turnover and active management interactions. These companies will have a clinical and cost savings focus, aiming to improve healthcare affordability. There will be no fixed allocations across geographies, sub-subsectors, company stages, and/or profitability.
Flury and Schröter said: "The current healthcare model is not sustainable and patient outcomes are being negatively impacted alongside the industry and investors. This fund aims to address this inequality and invest in companies that are offering different approaches through new treatment options, technology and innovative business models."
The current healthcare model is not sustainable and patient outcomes are being negatively impacted alongside the industry and investors."
This strategy will be made available to HSBC's wealth clients across its private bank and wealth and personal banking segments, in addition to targeting both wholesale and institutional investors with a particular focus on high-net-worth individuals, family offices and private banks.
As healthcare spending consistently outpaces GDP growth across markets, rising costs are straining healthcare systems globally which results in access restrictions. In 2018, global spending on healthcare reached $8.3trn, or 10% of global GDP. In the US, which accounts for nearly half (42%) of global healthcare expenditure, total spend is projected to increase by over 50% in the next eight years alone.
HSBC AM belives that investing in companies that focus on healthcare innovation can reduce the overall cost for all stakeholders in the system. Payers, for example insurers, stay within budget while ensuring quality care for their covered population. Doctors have no prescription restrictions imposed by payers and patients have access to best suited treatments for their disease.
The industry, like healthcare companies, recover R&D investments plus profit and investors are rewarded.
First published by our sister title Investment Week