Talking Point  

Accessing health sector via generalist funds creates diverse portfolio

Accessing health sector via generalist funds creates diverse portfolio
(credit: Photo by Denise H via Pexels)

Almost two thirds of advisers have said they gain exposure to the healthcare sector via dedicated pharma/biotech funds, according to the latest FTAdviser Talking Point adviser poll.

A third said they preferred generalist funds.

Despite these results, advisers spoken to by FTAdviser said they preferred to gain exposure to the healthcare sector through generalist funds as this provided for a greater level of diversification or through outsourcing the allocation decision-making to generalist managers who have expertise in that area.

Dominic James-Murray, chief executive of Cameron James, said: "We prefer to provide exposure to the healthcare sector through generalist funds rather than dedicated pharmaceutical or biotech funds. As this provides a greater level of diversification. A client request for direct exposure for dedicated pharma funds would be unusual. 

"Using generalists funds also allows you to work with fund managers who have a much longer track record of performance across a broader range of assets."

Martin Stanley, chartered financial planner at Rowley Turton, added: "We rarely use very niche, concentrated funds in one economic sector, partly because the volatility is typically higher than we would want.

"The Pharma/biotech sector certainly has an important place in a diversified portfolio, but how much? and at what point does the allocation decision change? We don't have the expertise to answer those questions on an ongoing basis.  Instead, we would rather outsource the allocation decision-making to generalist managers who allocate on an active basis according to their expertise.

"We prefer those generalist managers to have a highly flexible mandate: whether it’s pharma or some other area, we never want a manager being forced to hold a sector which they don't think is good value."