The funds set to benefit from vaccine deal
As markets react to the news of a successful COVID-19 vaccine trial from US pharma Pfizer and German biotech firm BioNTech, there are just three funds holding these stocks.
Shares in Pfizer, one of the US’ largest pharmaceutical companies, rose 15% while BioNTech, which was founded in 2008 and specialised in immunotherapy, rose 23%.
A statement between the two companies said a trial had been 90% effective in preventing COVID-19 in its participants in a Phase 3 study of over 43,000 people.
According to FE Analytics, the two funds within the Australian Core Strategies universe which held Pfizer were BetaShares Global Healthcare ETF Currency Hedged at 3.9% and Dimensional Global Value Trust at 1.5% while BioNTech, which was a far smaller firm than Pfizer, was held by Platinum European fund where it was the fund’s top holding at 5.7%.
While the BetaShares fund had strongly outperformed, the other two funds had struggled over one year to 30 September.
BetaShares Global Healthcare ETF had returned 14.6% but the Platinum European fund lost 15.3% and the Dimensional fund lost 16.6%. Both of these had underperformed their sector average with the European sector losing 10.2% and the global equity sector returning 3.6%.
In a quarterly review, Platinum fund manager Nik Dvornak said the healthcare companies in the fund had a “strong market position” but they had been hurt by the lockdown restrictions which had caused the fund’s underperformance.
“The healthcare companies the fund is invested in typically have innovative new product pipelines. During a lockdown, they cannot recruit candidates for clinical trials, their sales reps cannot meet doctors to explain the benefits of new medications and doctors are reluctant to change a patient’s treatment without a physical consultation,” he said.
“The patients themselves are self-isolating, avoiding doctors and hospitals because they are already ill and at higher risk should they contract COVID-19.
“Thus lockdown delays the development and commercialisation of innovative drugs, while the clock keeps ticking on the patents that protect them from competition. The impact on the drug developer is therefore real, but is a transitory impediment.”
AUTHOR
Laura Dew
Recommended for you
Australia’s “sophisticated” financial services industry is a magnet for offshore fund managers, according to a global firm.
The latest Morningstar asset manager survey believes ETF providers are likely to retain the market share they have gained from active managers.
Negative market movements, coupled with net outflows, have prompted a near $6 billion decline in Challenger’s funds under management for FY25’s third quarter.
The real estate investment manager has positioned the APAC region for future growth with an internal promotion to the newly created role of deputy head of Asia Pacific.
