How an ageing population can give you healthy profits

TRUST WATCH Worldwide Healthcare Trust

WHAT DOES IT DO? The Worldwide Healthcare Trust, which is managed by the world’s largest dedicated healthcare investment firm Orbi Med Capital, aims to achieve a ‘high level of capital growth’ for investors. Orbi Med was managing more than £11bn at the end of March.

WHAT DOES THE MANAGER INVEST IN? Sven Borho and Trevor Polischuk, the trust’s managers, focus primarily on US-focused healthcare companies. There are two European companies in the top ten holdings. Denmark’s Novo Nordisk, which specialises in diabetes care, and Dutch medical device company Wright Medical.

WHAT DO THE EXPERTS SAY? Laith Khalaf of Hargreaves Lansdown says the trust has ‘comfortably outperformed its benchmark over the last five years’. WHAT’S TO LIKE? Countries with state-subsidised care systems are struggling with how to look after increasingly old and unwell citizens.

Khalaf explains: ‘An ageing population in developed countries means there is robust demand for healthcare products.’

ARE THERE ANY DOWNSIDES? Khalaf says US drug pricing is clouding the sector. If America started bargaining with the firms to lower prices, there are concerns this could reduce profitability, weakening returns for investors.