Monthly commen­tary December: Tareno Health­care Funds

Market overview health­care sector

In December, the health­care sector posted a return of ‑0.8%, lagging behind the global equity market, which rose by 0.8%. Pharmaceu­ti­cals was the only sub-sector with a positive perfor­mance and continued the rally that began at the start of the fourth quarter. The develo­p­ment was signi­fi­cantly supported by agree­ments between several large pharmaceu­tical compa­nies, which promised price reduc­tions in return for a tempo­rary exemp­tion from poten­tial pharmaceu­tical tariffs, subject to additional invest­ment in US produc­tion.

Further positive impetus came from the approval of Novo Nordisk’s Wegovy oral contracep­tive pill and increased rotation into defen­sive sectors. On the other hand, cautious company outlooks, parti­cu­larly from Pfizer, which revived discus­sions about patent expiries and future growth prospects, had a dampe­ning effect.

Interest in M&A activi­ties in the biopharma sector remained high, while the biotech­no­logy sector took a breather after a strong perfor­mance over eleven months. Regula­tory develo­p­ments at the FDA and CDC led to increased volati­lity, parti­cu­larly in biotech and life sciences & tools stocks. Political uncer­tain­ties continued to weigh on provi­ders, services and managed care compa­nies. The month was also charac­te­rized by a signi­fi­cant upturn in IPO activity in the health­care sector.

Tareno Sustainable Health­care Fund

Portfolio changes

A new position in Alcon was estab­lished in December. At the same time, the positions in Coloplast and Sonova were sold.

Perfor­mance Review

The biggest positive attri­bu­tion drivers to the index were Roche, supported by a broker upgrade and Genen­tech’s agree­ment with the US govern­ment, as well as Bachem and Vertex follo­wing positive broker comments.

Essil­or­Lu­xot­tica had a negative impact follo­wing compe­ti­tion-related announce­ments, while Cencora as a result of profit-taking by pharmaceu­tical distri­bu­tors and Bristol-Myers Squibb as an uninve­sted position weighed on relative perfor­mance.

ESG

The compa­nies in the Tareno Sustainable Health­care Fund portfolio did not report any signi­fi­cant ESG-related incidents in December.

Tareno Impact Health­care Fund

Portfolio changes

No new positions were estab­lished and no existing positions were sold in the month under review.

Perfor­mance Review

The largest positive perfor­mance contri­bu­tions came from Axsome, supported by regula­tory progress on AXS-05, Aspen follo­wing the sale of Aspen APAC and Penumbra follo­wing a broker upgrade.

On the negative side, perfor­mance was negatively impacted by RadNet follo­wing a short report and increased compe­ti­tive volati­lity, Hypera without company-specific impetus and Inspire due to regula­tory uncer­tain­ties in the billing environ­ment.

ESG

The compa­nies repre­sented in the Tareno Impact Health­care Fund portfolio did not report any material ESG-relevant incidents in December.