Monthly report March 2026: Muddling Through the Macro Morass

Market overview

In March, global equities fell 6.4%, while the health­care sector declined 8.3%. Market perfor­mance was largely driven by macroe­co­nomic and geopo­li­tical develo­p­ments rather than sector-specific funda­men­tals. Escala­ting tensions around the Iran conflict heigh­tened volati­lity and triggered risk-on/risk-off dynamics, pushing health­care-specific news to the background.

The bright spot in March was M&A activity, with several notable transac­tions. In biopharma, Eli Lilly agreed to acquire Centessa for up to USD 7.8 billion, the largest deal of the month. Merck & Co. acquired Tern for USD 6.7 billion, and Biogen bought Apellis for USD 5.6 billion. Novartis committed up to USD 3 billion for a PI3Kα inhibitor and up to USD 2 billion for Excel­lergy, while Servier acquired Day One Biophar­maceu­ti­cals for USD 2.5 billion. Gilead announced the acqui­si­tion of Ouro for USD 1.7 billion plus milestones. M&A activity also extended beyond biopharma into health­care services, MedTech, and tools. Universal Health acquired Talkspace for USD 835 million, Cencora bought EyeSouth Partners’ retina business for USD 1.1 billion, and Amplifon agreed to acquire GN Store Nord’s hearing business for EUR 2.3 billion. Agilent also acquired Biocare for USD 950 million.

Regula­tory uncer­tainty remained a key overhang. The Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices (ACIP) faced an uncer­tain future after a federal judge ruled in favor of the American Academy of Pedia­trics, halting the recon­sti­tuted committee—a setback to Robert F. Kennedy Jr.’s efforts to reshape U.S. vaccine policy. In another develo­p­ment, Vinay Prasad left the FDA for the second time in a year follo­wing contro­versy over the agency’s handling of uniQure’s Huntington’s disease treat­ment, highlighting ongoing scrutiny of regula­tory decis­ions.

In Biotech­no­logy (-5.8%), many large-cap names lagged. AbbVie fell amid rising compe­ti­tive pressures, as Johnson & Johnson and Protago­nist continued to chall­enge the Skyrizi franchise. Amgen, Gilead, and Vertex also moved lower in the absence of material newsflow. In contrast, smaller-cap biotech­no­logy compa­nies showed relative resili­ence throug­hout the month. Despite elevated volati­lity across the sector, senti­ment was supported by ongoing high-premium deals, M&A specu­la­tion, and regula­tory develo­p­ments. The depar­ture of Vinay Prasad from the U.S. FDA was initi­ally seen as a positive catalyst, removing a perceived regula­tory overhang.

Within Pharma (-7.4%), weakness across several large-cap names weighed on overall sub-sector perfor­mance. Eli Lilly declined follo­wing a broker downgrade, while Roche came under pressure after setbacks in two clinical readouts. Astra­Ze­neca and Novartis also moved lower despite a lack of company-specific catalysts, reflec­ting broader market-driven selling. In the obesity space, Hims & Hers Health reached an agree­ment with Novo Nordisk to distri­bute branded obesity thera­pies while limiting compoun­ding activi­ties.

In Life Science Tools & Services (-7.6%), perfor­mance was weighed by ongoing sub-sector rotation and AI disrup­tion fears, with no company-specific updates to provide support.

Within Provi­ders & Services (-9.9%), perfor­mance was influenced by ongoing rotation, with drug distri­bu­tors, hospi­tals, and labora­to­ries seeing profit-taking after recent gains. Managed Care remained under pressure from both sector-wide and idiosyn­cratic factors. Elevance Health led declines after revealing that the Centers for Medicare & Medicaid Services plans to impose sanctions related to non-compli­ance with Medicare Advan­tage risk adjust­ment data spanning 2015–2023. Centene Corpo­ra­tion also weighed on the group, with shares dropping 16% follo­wing market­place member­ship and risk updates presented at a broker confe­rence, which in turn pressured other Managed Medicaid peers. Overall, Medicare Advantage–exposed names trended lower into late March as investors awaited the final 2027 rate announce­ments expected in early April.

MedTech (-12.1%) under­per­formed in March, despite its typically defen­sive charac­te­ri­stics, as ongoing sub-sector rotation weighed on the group. In addition, several idiosyn­cratic factors impacted large-cap quality names during the month. Boston Scien­tific presented results from the CHAMPION-AF trial for its WATCHMAN device at the ACC 2026 Scien­tific Sessions. While the data were broadly solid, it left a number of key questions unresolved. Opera­tional challenges also weighed on senti­ment. Stryker and Intui­tive Surgical were both affected by cyber­at­tacks, while Insulet issued a recall for certain lots of its Omnipod 5 pods. Finally, capital markets activity resumed with the first MedTech IPO of 2026, as MiniMed—the diabetes techno­logy spin-off from Medtronic—came to market.

Overall, March unders­cored how geopo­li­tical and macroe­co­nomic forces can overs­hadow sector-specific funda­men­tals in the near term. Even healthcare’s tradi­tio­nally defen­sive charac­te­ri­stics offered limited protec­tion, with MedTech and Managed Care among the more challenged segments. However, valua­tions for some high-quality names in MedTech and Tools & Services have now reached histo­ri­cally attrac­tive levels, sugge­sting poten­tial oppor­tu­ni­ties once uncer­tainty eases. Looking ahead to April, the combi­na­tion of imminent 2027 Medicare Advan­tage rate announce­ments and ongoing Middle East tensions points to continued near-term volati­lity. Nevert­heless, under­lying industry trends—robust M&A activity, innova­tion, and struc­tural demand drivers—remain supportive of longer-term growth across the health­care sector.

Portfolio review Tareno Sustainable Health­care Fund

In the last month, we initiated positions in Adaptive, Biogen, GSK, Guardant, Lonza and Natera, and we exited Ambu, Globus and Ypsomed. In March, the Tareno Sustainable Health­care Fund returned ‑9.8% while the reference index returned ‑8.3%. The largest attri­bu­tors vs. the index were:

• Roche Genus­schein (+23 bps): Not invested
• Eli Lilly (+14 bps): Shares lost 13% in March, and we are under­weight vs the index
• Bachem (+12 bps): Reported solid full-year results

The largest detrac­tors vs the index were:

• Roche Holding (-41 bps): Zealand and Roche reported Phase II ZUPREME‑1 data for amylin petrelin­tide in obesity. The trial showed 10.7% weight loss at 42 weeks, below expec­ta­tions and less than Lilly’s eloral­intide (~20% at 48 weeks). Petrelin­tide demon­strated a favorable toler­a­bi­lity profile, supporting a planned Phase II CT-388 combi­na­tion trial later in 2026. Subse­quently, Roche presented Phase III perse­vERA study results in ER-positive advanced breast cancer that did not meet its primary endpoint.
• Centene (-25 bps): Shares fell after manage­ment highlighted that elevated specialty pharmacy utilization in silver-tier plans is pressu­ring costs
• Cencora (-18 bps): Announced CFO’s retire­ment

Portfolio review Tareno Impact Health­care Fund

In the last month, we initiated positions in Biogen and Caris and we exited Amplifon. In March, the Tareno Impact Health­care Fund returned ‑9.9%. The largest positive contri­bu­tors were:

• Axsome (+11 bps): No specific news
• Teladoc (+6 bps): Positive broker updates
• Caris (+6 bps): No specific news

The largest negative contri­bu­tors were:

• Centene (-95 bps): Shares fell after manage­ment highlighted that elevated specialty pharmacy utilization in silver-tier plans is pressu­ring costs.
• Amplifon (-90 bps): Reported weak Q4 results and announced the EUR 2.3 billion acqui­si­tion of GN’s Hearing Aid business, a major strategic shift that adds execu­tion risk, with a poten­tial equity raise later this year as an overhang.
• Tandem (-83 bps): No specific news