International biotechnology – Outperformance and income
Under the leadership of its manager, Carl Harald Janson, International Biotechnology Trust (IBT) is building a track record of outperformance of both its benchmark, the Nasdaq Biotechnology Index and the average of its peer group (see page 13 of this note for the figures).
The biotech sector, which IBT focuses on, benefits from long term structural growth drivers (listed on page 3) such as ageing populations in the developed world and an emerging middle class in developing markets. After a weak start in 2018, the Nasdaq Biotechnology Index has now recovered. The manager believes that the “American Patients First” document released by the US government on May 11 reduced investors’ concerns over drug pricing.
IBT pays a regular dividend (4% of the NAV, payable in two instalments – see page 14 for more detail). This was introduced to widen IBT’s appeal, beyond capital growth, to investors that may also have an income requirement.
IBT is the longest-established of the London-listed funds specialising in the biotech/healthcare sector. It aims to achieve long-term capital growth by investing in biotechnology and other life sciences companies and offers investors the highest yield in the sector while keeping its day-to-day running costs low. The portfolio is invested primarily in quoted companies but IBT also has some exposure to unquoted companies.
IBT : International biotechnology – Outperformance and income
