Last checked at 
29 Jul 2019 15:30
London, UK, 29 July 2019
Edison issues review on The Biotech Growth Trust (BIOG)
The Biotech Growth Trust (BIOG) is managed by Geoff Hsu and Richard Klemm of OrbiMed Capital and aims to generate long-term capital growth from a diversified portfolio of global biotech equities. Investment performance has improved markedly in 2019, following a tough few years, and the managers retain their record of long-term outperformance versus the NASDAQ Biotechnology index. They remain very optimistic on the prospects for the global biotech sector, citing a favourable regulatory environment, a 'golden era of innovation' and an uptick in merger and acquisition activity, and believe that political noise in the run-up to the 2020 US presidential election will be manageable for the industry.
BIOG's current 6.6% share price discount to cum-income NAV is somewhat narrower than the 7.2% one-year average, but a little wider than the 6.3%, 6.0% and 5.3% average discounts over the last three, five and 10 years respectively. Investor sentiment towards the sector is poor; if this were to improve, there is potential for a narrower discount, and continued outperformance could also be a contributing factor. BIOG can gear up to 20% of NAV; at end-June 2019, net gearing was 6.2%. The trust does not pay a dividend.
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