Companies in the healthcare sector look set to deliver growth as strong as has been achieved by technology companies such as Amazon and Google, according to the managers of the £6.6bn Scottish Mortgage investment trust.
The comments appear in the commentary accompanying the half-year results statement of the trust, which is the largest investment trust on the UK market and a constituent of the FTSE 100.
For the six months to 30 September, the trust returned 15 per cent, compared with 8 per cent for the average fund in the AIC Global sector in the same time period.
The trust is managed by James Anderson and Tom Slater, who drew parallels between the current crop of super rising stocks and where they see them appearing in the future.
The managers said the launch of the first iphone a decade ago was the catalyst for six giant technology companies, Alphabet, Amazon, Facebook, Alibaba, Tencent and Baidu, to grow to a scale where they dominate sectors of the global economy.
The trust sold its Apple shares last year as the managers said the company has not created a properly innovative new product since the death of Steve Jobs.
But the managers believe advances in healthcare technology as profound as the creation of the smartphone will drive returns for a small number of large healthcare companies in future.
Ilumina is a very significant investment in the Scottish Mortgage investment trust.
The trust has 75 holdings, with 13 per cent of the capital deployed in unquoted companies, a level that has not increased over the past six months.
Dividends for the six months in question are expected to be 1.39p, the same level as last year, though the payment will almost certainly come from capital gains, rather than income.
The trust trades at a premium of 2.4 per cent, with the board of the trust saying it will continue to issue new shares in the trust in order to stop the premium becoming excessive.
Over the past five years, the trust has returned 236 per cent, compared to 108 per cent for the sector average.
David.Thorpe@ft.com
