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Insync continues to increase the fund’s exposure to global healthcare

Insync has increased its Medtronics position to be largest holding in its portfolio.

“The slowdown in China will have relatively minimal impact on the outlook for Medtronics which is benefitting from the powerful megatrend in the growing demand for healthcare products and services and through innovation,’ said Monik Kotecha, Insync Funds Management.

In a low global growth environment Insync Funds Management is still finding opportunities in the global healthcare sector. Whilst global GDP is forecast to grow at around 2-3%, and there are growing concerns the slowdown in China will further negatively impact the global economy, Insync is finding opportunities in the global healthcare which they forecast to grow at a pace of 2x GDP over the coming years.

Insync finds the global healthcare sector has characteristics it seeks in exceptional businesses:

  • including high levels of profitability
  • strong free cash generation, and
  • strong capital allocation back to shareholders in the form of rising dividends and buybacks.

In the recent market volatility Insync added to its position in Medtronics, the leading medical device company in the world.

“Medtronics is extremely well diversified across different products and geographies and has leadership positions in cardiology, general surgery, vascular, neurology, spine, and diabetes markets.”

The company is forecast to generate free cash flow of over $7bn in 2016 and is committed to returning 50% of its free cash flow to shareholders in the form of growing dividends and buybacks. The slowdown in China will have relatively minimal impact on the outlook for Medtronics which is benefitting from the powerful megatrend in the growing demand for healthcare products and services and through innovation. The recent volatility in global markets provided Insync the opportunity to increase it’s holding in Medtronics.

Insync manages a concentrated portfolio of 15-30 exceptional global companies in the Insync Global Titan’s Fund with Medtronics now the Fund’s largest holding.

Originally published 31 August 2015