In December, the Worldwide Healthcare Trust (LON:WWH) NAV per share total return was -3.4%, the share price total return was -4.6% and the MSCI World Health Care Index (Company’s Benchmark) was -2.4%, on a net total return, sterling adjusted basis.
Global equity markets were largely flat in December. The U.S. Federal Reserve enacted its third interest rate cut of the year, by 25 basis points, bringing the target rate to 3.50% to 3.75%. Otherwise, fundamental news was scant and a “Santa Claus Rally” did not materialise. Healthcare stocks underperformed in the month due to a mix of profit taking, modest news flow, a momentum shift (particularly in MedTech), and positioning ahead of the New Year. All benchmark healthcare sub-sectors declined in December, save for Pharmaceuticals (up de minimis).
Sources of positive absolute contribution were few. The largest contributor in the month was Structure Therapeutics, as investor enthusiasm for oral weight loss assets increased into year-end. The stock more than doubled after the company announced updated data for their lead pipeline asset that was very competitive, perhaps “best-in-class” for an oral small molecule.
The largest detractor in December was Boston Scientific, a mix of profit taking, momentum shift, and investor concern about share loss in the multi-billion dollar ablation business. Another detractor of import was Alnylam Pharmaceuticals. Share price weakness resulted from weaker than expected prescription volume metrics for their lead commercial asset, Amvuttra (vutrisiran), a medicine to treat a specific form of heart disease. On a sub-sector level, negative excess return of note come from Medical Technology, Emerging Markets, and Pharmaceuticals.
Despite the market lethargy of December, we enter 2026 with a very bullish outlook for healthcare. The resolution of any drug pricing overhang in the U.S. has been perhaps the largest catalyst in the healthcare space in over a decade. M&A in biotechnology continues to inflect to start January. Additional interest rate cuts are on the horizon. Innovation remains at all time highs. The set-up to start the year bodes well with the composition of the portfolio.
Worldwide Healthcare Trust invests globally in healthcare companies, including pharmaceuticals and biotechnology, aiming for long-term capital growth through a diversified portfolio, with selective use of gearing and derivatives.
