Rudi Van Den Eynde
Head of Thematic Global Equity
Our investment universe covers all companies involved in the fght against cancer. This means that we are not targeting any particular sector, but all industries potentially active in this feld.
There are currently enormous needs in this domain, including diagnosis through mass screening, which must be made easier and more acceptable, and through tumour profling, which provides a deeper understanding of each patient’s cancer, and also through technological progress using precision systems, to enhance radiation treatment, and of course through the range of available drugs.
We cover all regions and we can invest in the different stages of solutions development across all domains.
Cancer, in its multiple forms, is the second-leading cause of global mortality. Demand is therefore very strong.
Furthermore, the range of players involved has broadened suffciently to provide quite a large investment universe. This enables us to construct a highly diversifed portfolio by selecting equities which may potentially increase in value as companies grow.
Moreover, as a responsible investor, Candriam associates its investments with meeting the United Nations sustainable development goals (SDGs).
The 3rd UN sustainable development goal aims at ensuring healthy lives and promoting the well-being of all at all ages.
Our strategy espouses these objectives and aims to support companies seeking solutions against cancer.
Under our analysis, we adopt a fully product-based approach.
Companies must develop and/or market products which clearly enhance results for patients. We carry out in-depth analysis of clinical & medical data, comparing them to existing treatments and therapies to assess whether they enable improvements. In order to do so, we have built up a team composed
of scientists, chiefy biotech PhDs, who assess the clinical quality of future therapeutic solutions and therefore detect tomorrow’s winners before their
success is priced into their share price.
We also cross-reference our fundamental analysis with a tried & tested valuation, as we wish to avoid investing in overpriced stocks which will have only
limited upside potential. Stock picking is also based on a non-fnancial analysis aimed at gaining a better understanding of the risks and opportunities associated with ESG (Environnemental, Social & Gouvernance) criteria(1).
We also assess the extent to which a company’s activities are exposed to major sustainability issues, and how it manages its relations with stakeholders.
We exclude companies that fail to meet the 10 Principles laid out in the United Nations’ Global Compact, as well as controversial activities such as arms, tobacco, thermal coal and other businesses we consider unsustainable.Lastly, our selection process is based on core convictions. We draw on our in-house resources to undertake proprietary clinical and fnancial analysis. This process ultima tely enables us to reduce the investment universe(2) by 20% or more.
This stringent process has already proved its effciency through successful stock picking in the pharmaceutical & medical sectors for over 20 years and our know-how is recognised throughout the market.
The entire health sector has been impacted by the pandemic, from companies involved in the production of vaccines to those working on Covid-19 diagnosis.
The current environment is promising for several reasons, however. First of all, health stocks are said to be defensive, as they are less sensitive to economic volatility. Given the uncertain environment, investors are increasingly focusing on this type of sector. Some segments of the healthcare sector, such as pharmaceuticals and biotech, are also benefting from attractive valuations.
Finally, let’s not forget that this sector has a promising outlook due to socio-demographic changes (population ageing and increased wealth, etc.). It is worth noting that the therapeutic oncology market is set to grow by approximately 10% per year over the next fve years (Source: McKinsey 2020 Oncology Market Outlook).
Besides the fact that this strategy is almost unique in the market, Candriam can also boast 20 years’ expertise in this particular feld, through its hallmark
biotech equity investments. We also owe our success to the people involved. During the stock-picking process, we draw on both fundamental analysis, provided by our 4 biotech experts, and also on input from our emerging equity markets team, along with the tech stocks team and the thematic equity team.
Lastly, don’t forget, either, that our strategy is also backed by input from an independent scientifc review committee. The committee plays a number of roles including providing investment ideas and also clarifying new technologies or medical protocols currently under development.
Ultimately, the committee provides us with other expert opinions and therefore challenges our views.
We believe that there are 2 key reasons for investing in this fund. Firstly, the fght against cancer has become an issue for broader society and is affecting many global sectors. Access to healthcare is progressing constantly and is therefore becoming a worldwide megatrend. By investing in this fund, you are supporting a broad range of innovative companies which may prove to be game-changers in cancer research.
Secondly, because health is an issue that concerns us all, each year Candriam dedicates a portion of the net management fees of our responsible range and thematic funds to the fnancing of social impact initiatives, coordinated through the Candriam Institute for Sustainable Development.
Finally, for patients: to ensure that this disease becomes a “chronic” disease, which patients can live with on a daily basis.
Rudi Van Den Eynde, Head of Thematic Global Equity at Candriam, explains to investors the approach he used to create and develop an investment strategy in the oncology sector.
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