'Corona Solver' Pharmaceutical and Diagnostic Kits... Healthcare Fund Returns Soar

Average Monthly Return of 25.32% in the Last Month... More Than 15 Products Exceeding 30%

[Asia Economy Reporter Kum Boryeong] As pharmaceutical and diagnostic kit-related stocks have shown strong gains due to the impact of the novel coronavirus infection (COVID-19), healthcare fund returns are also thriving.

According to fund rating agency FnGuide on the 23rd, the average return over the past month for 26 healthcare funds with assets under management of over 1 billion KRW as of the previous day was 25.32%. Among the 43 thematic funds classified by FnGuide, healthcare funds rank among the top in terms of returns. Since the beginning of the year, the return was 3.58%, ranking second after gold funds, and the 6-month return was 14.09%, ranking first.

Although healthcare funds compete with gold funds for first and second place in returns, healthcare funds have a higher asset base. Funds have been steadily flowing into healthcare funds, increasing assets by 35.5 billion KRW over six months, 33 billion KRW over three months, and 13.3 billion KRW over one month. While gold funds have good returns, their assets decreased by 19.5 billion KRW and 5.5 billion KRW over six and three months, respectively.

Comparing with other thematic funds, the performance of healthcare funds is clearly outstanding. IT funds, which once ranked high due to a semiconductor boom, posted a 3-month return of -11.91% and a year-to-date return of -6.94%. Commodity funds showed returns of -33.23% over three months and -32.75% year-to-date due to a sharp drop in international oil prices.

Due to the unfavorable market conditions caused by the COVID-19 crisis, only three thematic funds, including healthcare, domestic bond ETFs, and gold funds, have shown growth in returns over three months and year-to-date.

Looking at individual healthcare funds, more than 15 products recorded returns exceeding 30% over one month. The 'Mirae Asset TIGER Healthcare Securities Listed Index Investment Trust (Stock)' ranked first with 34.31%. The 'Samsung KODEX Healthcare Securities Listed Index Investment Trust [Stock]' showed 34.28%, and 'KB KBSTAR Healthcare Securities Listed Index Investment Trust (Stock)' posted 32.48%. Several products, such as 'DB Bio Healthcare Securities Investment Trust 1 [Stock] Class A-E' (27.55%), also approached 30% returns.

The healthcare index has recently shown remarkable gains. The KRX Healthcare Index rose 48.85% from 2,187.22 on the 19th of last month to 3,255.65 as of the previous day. Compared to the beginning of the year (2,905.58), it increased by 12.05%.

Healthcare stocks performed well in the first quarter despite COVID-19. Samsung Biologics recorded consolidated sales of 207.2 billion KRW and operating profit of 62.6 billion KRW in the first quarter. Sales increased by 65.3% year-on-year, and operating profit turned positive, resulting in an earnings surprise. Shinhan Financial Investment estimates Celltrion Healthcare's first-quarter sales and operating profit to have increased by 66.1% and 373.3%, respectively, to 366.2 billion KRW and 44.3 billion KRW. Samsung Biologics' stock price rose 33% from 436,000 KRW on the 23rd of last month to 580,000 KRW as of the previous day, and Celltrion Healthcare's stock also increased by 27% during the same period.

Researcher Lee Dalmi of SK Securities analyzed, "Globally, active investments are being made in the development of COVID-19 treatments, and our government is also implementing active support policies for treatment development," adding, "Domestic pharmaceutical and bio companies can benefit from government support."

This content was produced with the assistance of AI translation services.