Mid Wynd International investment trust update: boosted by healthcare and IT stocks

The Mid Wynd International investment trust beat its benchmark index last month, mainly down to strength from its investments in healthcare and IT companies. Saloni Sardana looks at the trust's latest performance. 

Mid Wynd International investment trust (LSE: MWY) enjoyed a robust performance last month due to strength in both healthcare and IT companies. 

The fund’s net asset value (NAV – the value of the underlying portfolio) beat the MSCI World Index, with a rise of 2.1% as of 10 December compared to just 1.1% for the benchmark. 

The trust, whose aim is to buy quality stocks worldwide, also outperformed in the third quarter of this year due to investments in Japanese automation companies and investments in mRNA vaccine producers, said its managers, Simon Edelsten and Alex Illingworth.

“We invested in the mRNA vaccine makers as the efficacy and persistence of their vaccines became apparent. Both Moderna and Novovax performed very well during the period,”  adding that US drugmaker Pfizer also contributed to the growth. 

The automation sector had fared well following a lacklustre period, despite concerns of slowing Chinese growth as the “prospect of industrial demand recovering in Western economies” made up for the China growth concerns. Stocks such as Keyence, which makes automated sensors, performed well. The trust also reduced exposure to sectors likely to be most hit by the slowdown. 

However, exposure to energy transition as a theme was reduced as the price of iron ore and copper fell back, partly due to China imposing restrictions on industrial activity and partly over fears about how an expected default by Chinese property developer Evergrande – the second-largest property developer in China – might hurt the Chinese economy.

The managers noted that “we may now face a period of lower growth expectations”. However they are optimistic that they can avoid the sectors that will be hit hardest. Even if inflation continues to rise, they feel comfortable about the pricing power of the companies held in the portfolio.

“Our view is that our chosen themes may see improved trading even if inflation data tracks higher,” the managers wrote. “We also think that the specific companies we have selected for the portfolio are strong enough to be able to pass on cost increases if they face them,” they added.

As of 30 November, healthcare accounted for almost a quarter (24%) of the fund, while IT and industrials were the two second-largest sectors in the portfolio, accounting for 22.4% and 13.3% respectively of the fund, while drug giant Pfizer represented the trust’s biggest single holding, worth 3% of the portfolio. As of 13 December, the trust traded on a premium to NAV of about 2%. 

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