In a webcast, healthcare analyst Kim Tracey said the fund had moved overweight on healthcare with positions in CSL, Resmed and Fisher & Paykel.
Since the start of the year, shares in Fisher & Paykel returned 57% while Resmed rose 14% and CSL rose 10% compared to losses by the ASX 200 of 5.2%.
“We are overweight healthcare, we like companies with long duration growth. Healthcare as a sector has been impacted by two factors recently; patient behaviour and resources supply. We have positions in CSL, Resmed and Fisher & Paykel as we believe they are high-quality offshore earners and global leaders in an attractive long-term growth market,” Tracey said.
“Fisher & Paykel is a new addition to the fund, we are very hopeful it will be a long-term winner from COVID-19 and physicians are already familiar with using their equipment. Resmed makes equipment for treating sleep apnoea and is another winner, we hope this will offset weakness in other parts of the business. Finally, CSL is a vaccine producer and has been working on the COVID vaccine trial with AstraZeneca and the University of Oxford.
“We are focused on the long term but have to be mindful of the short-term challenges. We hope COVID will be a positive for some of our holdings.”
While many are hopeful of a COVID-19 vaccine within a year, Tracey warned this would be unlikely as many trials were still in phase one which meant they were not yet being tested on humans. There would also be significant logistical challenges when it came to distributing the vaccine.
“What would normally take years is being done in months but it could still take years. There are over 100 trials which are still in Phase 1 and only three which are phase three. A vaccine needs to be completely safe if it is going to be distributed to millions, if not billions, of people globally,” she said.
“There are also big logistical challenges to factor in, it would require eight billion syringes and glass vials and drugs are tricky to transport and store as they have to kept cool and stable and require cold storage. There are also security and air cargo problems to consider and we would need trained people to administer the vaccine. None of these challenges are insurmountable but it is a daunting task.”
According to FE Analytics, within the Australian Core Strategies universe, the T. Rowe Price fund lost 7.9% over one year to 30 September, 2020, versus losses by the Australian equity sector of 7.3%.
