Baillie Gifford China to boost healthcare exposure
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Mike Gush, the manager of the Baillie Gifford Greater China fund, is actively looking to increase the portfolio’s exposure to the healthcare sector.
Gush says the fund, which was first opened for trading as an institutional product in November last year and then to the wider retail market in June, has traditionally had only limited exposure to healthcare. Currently, the sector weighting in healthcare is close to zero.
Along with infrastructure, he says, the healthcare sector will receive a boost from China’s massive economic stimulus package. “We favour playing those themes, rather than the obvious ones like infrastructure,” he says.
“We are also looking at other companies, but the most interesting are those that are providing medical equipment, drugs, and Western and traditional Chinese medicine”
Mike Gush
One of the companies he is looking at is Sinopharm, the China National Pharmaceutical Group Corporation, and one of China’s largest. “We are also looking at other companies, but the most interesting are those that are providing medical equipment, drugs, and Western and traditional Chinese medicine” he says.
Yet Gush, who has just returned from China where he visited more than 30 companies operating in various sectors, says he is not targeting a certain percentage exposure in healthcare. “Whether we buy the company depends on its attractiveness,” he says.
“We select our holdings through a bottom-up process and the companies have to match our criteria.” The portfolio usually holds about 75 different stocks.
Gush and his co-manager Richard Sneller, are also seeking investment opportunities in other sectors, including technology, financials and consumer, in a market that is developing at an unprecedented rate.
Compared with Japan’s high growth phase, Gush says, China’s market is still in an early stage and there is a potential for significant returns for investors. “Valuations remain attractive given the long-term growth prospects,” he says.
The Baillie Gifford Greater China fund is invested in mainland China, Taiwan and Hong Kong. It is benchmarked against the MSCI Golden Dragon index.
Stefanie Eschenbacher is a guest of Baillie Gifford in Edinburgh
