RE: Sunday Times5 Apr 2020 11:23
Hidden science gems taking on the fight against corona
Should you take a bet on the little-known firms that could be our saviours?
Healthcare funds have been relatively resilient during the crisis
Healthcare funds have been relatively resilient during the crisis
YULIA NAUMENKO
Ali Hussain
Sunday April 05 2020, 12.00am, The Sunday Times
Healthcare companies are at the forefront of the fight against the coronavirus pandemic, and if you’re looking to invest, the trick is to pick the firms best placed to help the world out of the crisis.
The share price of London-listed Novacyt, which produces testing kits for the virus, has risen more than 1,300% this year after a global surge in demand. Last week India and Argentina became the latest to approve its devices.
Another top performer is Teladoc Health, listed on the New York stock exchange. It allows doctors to provide services remotely and has seen a huge increase in demand in recent weeks. Its share price is up about 90% this year. It has been dubbed Zoom for doctors; Zoom is a video conferencing tool that has also soared in popularity thanks to an enormous increase in the number of people working from home.
Buying individual shares is always a risky business, particularly when it comes to new technology and medicines.
However, as global stock markets endured double-digit falls, healthcare funds have been relatively resilient.
From the start of the year until March 26, healthcare funds have fallen between about 5% and 17%, according to analysis by the data company Morningstar. The FTSE 100 index is down 24% over the same period.
It is often individual holdings that perform well if they get approval for their products from governments. For example, the BNP Paribas Health Care Innovators fund is the top performer in its sector. It is down 5.1% this year, but of the 40 stocks it holds, only three have mitigated overall losses for investors, including Teladoc.
Here we highlight firms that the experts are buying.