Tareno Healthcare Funds monthly report May 2026

Market review

The healthcare sector returned +1.9% in May, driven by the Q1 earnings season and supported by industry and scientific conferences. Following the close of the reporting season, the EPS trends seen in April continued with 76% of companies beating expectations and delivering higher positive surprises than in Q4. On the revenue side, 63% exceeded forecasts, with a level of positive variance similar to the previous quarter. M&A activity remained robust over the course of the month. A consortium led by CVC and GBL agreed to acquire Recordati for USD 12.5 billion, while Angelini acquired Catalyst for USD 4.1 billion. Large pharmaceutical companies were also active: Eli Lilly agreed to acquire Curevo, LimmaTech and Vaccine Company for a total of up to USD 3.8 billion as part of a renewed offensive in the vaccine sector, while Bayer took over Perfuse (up to USD 2.5 billion) and Roche PathAI (up to USD 1.5 billion). UCB also planned to acquire Candid (up to USD 2.2 billion), and Esperion was taken private by Archimed for USD 1.1 billion. In Medtech, Boston Scientific invested USD 1.5 billion in MiRus, acquiring 34% and returning to the TAVR market after the ACURATE platform was discontinued in 2025.

Life Sciences Tools & Services (+6.7%) recorded a volatile but strong May overall, with 12 out of 13 index components in positive territory. A strong start was followed by a mid-month decline and a recovery by the end of the month. The initial rally was driven by strong results from Waters and Illumina, while the weakness in the middle of the month was due to a sector-wide rotation. The subsequent recovery was supported by positive momentum such as Elliott’s investment in Bio-Rad, a strong Q1 from Merck KGaA, a convincing Investor Day from Thermo Fisher and solid numbers from Agilent.

Pharma gained +4.1%, driven by heavyweight Eli Lilly (+18.4%). The company reached a new all-time high following expanded insurance coverage for Zepbound and inclusion in preferred lists by CVS, including additional coverage for the new weight loss pill Foundayo. Lilly also released updated long-term data on the triple-G agonist, with weight loss of 28.3% at 80 weeks and 30.3% at 108 weeks. Abstract releases in the run-up to the ASCO conference in Chicago (May 29-June 2) also influenced performance in the oncology sector.

Providers & Services rose +0.3%, supported by continued strength in Managed Care (+5.0%) and solid Q1 results from CVS. Weakness in Drug Distributors (-6.8%) following figures from Cencora and McKesson and in the Hospital sector (-12.9%) had an offsetting effect. The latter was impacted by a weaker case mix and lower HIX volumes at HCA as well as concerns around Medicaid supplemental directed payments (SDPs).

Biotech remained virtually unchanged (+0.1%) and was driven by solid M&A activity, ASCO abstracts and positive regulatory news such as the departure of Dr. Makary from the FDA.

MedTech (-3.7%) remained under pressure due to subdued sentiment and capital rotation. Hearing aids were a bright spot, with the three main suppliers delivering returns of 17-24%, supported by strong results and improving market conditions. Fundamental trends remain intact, supported by demographics, intact demand, stable prices and strong innovation momentum in cardiology, diabetes and robotic surgery.

Review Tareno Sustainable Healthcare Fund

Last month, we added to one position in Alnylam and did not close any existing positions. In May, the fund achieved a return of 2.7%, while the benchmark index rose 1.9%.

The biggest positive attribution drivers compared to the index were:

• Dexcom (+31 bps): Positive momentum after strong long-term growth outlook at Investor Day; additional entry of Elliott Investment Management
• Zoetis (+23 bp): Not invested
• J&J (+18 bp): Share fell by 9.8%, underweight compared to the index

The biggest negative attribution drivers in relation to the index were:

• Eli Lilly (-42 bp): Share up 18.4%, underweight relative to the index
• Cencora (-28 bp): Weaker than expected results driven by a weaker US Healthcare Solutions segment; later recovery thanks to adjusted EPS guidance driven by share buybacks
• Boston Scientific (-21 bp): The CEO declared just a few weeks after the Q1 figures that WATCHMAN heart implants, viewed in isolation, were not growing after all, raising doubts about the visibility of the trends. The confirmed annual outlook could not compensate for the negative investor sentiment.

Review Tareno Impact Healthcare Fund

Last month, we did not add any new positions and did not close any existing ones. In May, the Tareno Impact Healthcare Fund achieved a return of 9.2%.

The biggest positive contributions were:

• Guardant (+156 bps): Beat-and-raise quarter and earlier-than-expected FDA approval for the expanded Guardant360 test; also inclusion of Guardant Shield in new screening guidelines
• Agilon (+146 bps): Share price up 230% in May thanks to strong Q1 figures and analyst upgrade
• Humana (+120 bps): Positive momentum after strong Q1 results and support from CVS results

The biggest negative contributions were:

• Tandem (-39 bp): Share price decline despite solid figures, as investors see 2026 as a transition year, characterized by two changes: PAYGO in the US and GODIRECT internationally. However, the share recovered over the course of the month and had recovered most of its losses by June 1
• ResMed (-34 bps): Better-than-expected results, but weaker US device sales and GLP-1 concerns weighed on sentiment
• BioNTech (- 25 bp): Weaker Q1 sales due to declining COVID-19 vaccine sales