BB Healthcare Trust PLC confident on defensive healthcare sector amid

What it does

() is a healthcare trust focused on global healthcare equities. It is run by the management team behind the successful BB Biotech Investment Trust.

The fund invests in a maximum of 35 companies at any one time, and there are no restrictions on geographies, market cap or sub-sector.

Although there are no restrictions on geography, the bulk of BB’s investments are in the US, which is perhaps unsurprising given that the US is home to the world’s biggest pharma market by quite some way.

The firm is set to be promoted to the FTSE 250 in June’s quarterly reshuffle.

Top ten holdings as of May 31:

Esperion (7.7%)

Bristol Myers Squibb (7.3%)

Anthem (7.1%)

CareDx (4.9%)

Charles River (4.9%)

Hill-Rom Holdings (4.7%)

Insmed (4.7%)

(4.6%)

GW Pharmaceuticals (4.4%)

Evolent Health (4.3%)

How it is doing

As at May, net asset value was 159.35p, up 10.7% so far in 2020 and up 74.8% since launch.

What the boss says: Paul Major and Brett Darke, investment managers

“The equity narrative continues to evolve toward recovery, with cyclicals and consumer discretionary sectors leading the market up as defensives fall back out of favour. Simply put, the market mantra is that the worst is now behind us.”

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What the broker says: Peel Hunt

“Healthcare has historically been a valuable source of equity income for investors. However, this can be at the expense of capital growth. BB Healthcare Trust () pays its dividend out of capital and currently offers a yield of 3.0%. The benefit of this approach is that it allows the managers to adopt an unconstrained and high conviction approach, without being tied to the high-yielding, often ex-growth stocks in their universe.”