The manager believes innovation is key to successful stock picking, as a potential driver of superior returns. Innovation adds value to drug development as once a medicine is commercialised it has the potential to generate substantial cash flow. This cash flow is highly predictable due to a defined patient pool, price and targeted penetration rate, and long lasting due to patent protections. The manager believes value can be achieved by investing in companies with strong fundamentals that provide growth opportunities fuelled by innovation, as well as capturing potential related to emerging markets and an ageing global population.
The process focuses on adding value through bottom-up stock selection, based primarily on fundamental research. The manager seeks to identify innovation opportunities through the identification of top-down trends, with a focus on new growth opportunities and areas of future returns. A set of defined opportunities is established on which they assess companies, meeting up to 140 companies annually and looking at competitiveness and valuation to determine innovative companies with attractive valuations. The portfolio of approximately 50-60 stocks is diversified across sub-sectors and therapeutic indications to reduce risk. The manager uses a disciplined buy and sell process as part of its ongoing risk management function.
GAM Health Innovation Equity is managed by Christophe Eggmann who has specialist knowledge and long-term investment experience of identifying attractive opportunities in the healthcare sector.
Christophe has autonomy over the investment process and his role combines both research and fund management, however he frequently exchanges information and views with the other members of GAM’s equity investment teams.
Investment risk management is primarily Christophe’s responsibility, as it is an integral part of each step of the investment process and is central to the strategy. However, an additional risk oversight function is performed independently by GAM’s risk teams.
We value innovation by assessing the incremental benefit of a new product or service to the patient or the healthcare systemChristophe Eggmann, Investment Director.
All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.
Non-base currency share classes may or may not be hedged to the base currency of the Fund. Changes in exchange rates will have an impact on the value of shares in the Fund which are not denominated in the base currency. Where hedging strategies are employed, they may not be fully effective.
Investments in equities (directly or indirectly via derivatives) may be subject to significant fluctuations in value.