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JSS Sustainable Equity - Future HealthPierin Menzli, Head Equities ThematicSwitzerland Edition6th May 2020For Professional Investors OnlyFor questions please email: wholesale@jsafrasarasin.com or ic@jsafrasarasin.com
Agenda Why Invest in the Future of Health Implications of COVID-19 Why This Strategy Investment Process Strategy Characteristics Opportunities and Risks Fund Details2
Why Invest in the Future of Health3
The Fund in a NutshellDistinctivestrategyPortfolioconstruction Capture growth opportunities across health trendsStock picking with rigorous due diligence and fullyintegrated ESG analysis Concentrated portfolio (40-60 positions) Balanced approach leads to diversification and multiplesources of alpha Bottom-up stock selection based on fundamentalresearch4
Our Opportunity Set – Three Key Drivers132DemographicShiftsFrom Patientsto ConsumersInnovativeMedicalTechnologiesHealthcare spendingis increasingexponentiallyPeople are takinghealth in theirown handsNew technologiesare enablingbetter outcomes5
Investment OpportunityDemographic ShiftsHealthcare spending is increasing exponentiallyMedical costs increase with ageSpending in emerging markets is set to growPatients aged 65 are three times more likely to behospitalised than those aged between 45 and 64 Medical spending per age group1Demographic changes coupled with the rising wealth of themiddle-class will drive health spendingGovernments are set to increase expenditure in the sectorwhile the growth in income will drive out-of-pocketspendingHealthcare market growth by region2 32’90312.8%13.1%13.4%Middle EastAfricaAsia PacificGrowth* %10.7% 16’9778.9% 10’212 3’749 4’8560-1819-4445-6465-8485 Global MarketSouthAmericaData: CAGR: period 2018 – 2022. Source: 1) Peter G. Peterson Foundation; Centers for Medicare and Medicaid Services, National Health Expenditures by Age andGender, April 2019. Data refers to 2014. 2) Business Wire; The 11.9 Trillion Global Healthcare Market: Key Opportunities & Strategies (2014-2022) ResearchAndMarkets.com; June 2019.Warning: Data relating to the past is provided for information purposes only and is no guarantee of future developments.6
Investment OpportunityFrom Patients to ConsumersPeople are taking health into their own handsTelehealthHealthy NutritionSmart WearablesConnected devices allow doctors tomonitor patients’ situation remotelythrough live video, audio and SMSwhile reducing the need for inperson consultations.The demand for fortified foods andclean labels is rising along with thatfor plant-based alternatives, tosatisfy a growing and increasinglyhealth-conscious population.The ability to collect and process thedata of users' health and activityallows for personalized care throughongoing feedback.Market projected to grow at 17%CAGR and surpass USD 55.6 billionby 20251Market projected to grow at 6%CAGR and surpass USD 236 billionby 20242Market projected to grow at 18%CAGR and surpass USD 74 billionby 20253Data: Global market data for Telehealth, Health and Wellness Food, Smart Wearables - CAGR forecast as of 2020. Source: 1) MarketsAndMarkets; TelehealthMarket by Component Software & Services (RPM, RTM), Application (Teleradiology, telestroke, teleICU), Hardware (Glucose Meters), End-User (Provider, Payer,Patient), Delivery Mode (On-Premise, Cloud) Trends & Global Forecast to 2025; March 2020. 2) PR Newswire; The Global Health and Wellness Food MARKET isexpected to grow by USD 235.94 during 2020-2024, progressing at a CAGR of 6% during the forecast period, March 2020 3) MarketWatch; 2020-2025 GlobalWearable Technology Market Trends, Demand, Industry Overview and Applications; March 2020.Warning: Data relating to the past is provided for information purposes only and is no guarantee of future developments. Forecasts are not a guarantee and can 7differ significantly from actual results.
Investment OpportunityInnovative Medical TechnologiesNew technologies are enabling better outcomes for patientsWireless technology, AI, robotics, miniaturization, and the improvement of computing power are fueling healthcare innovationsTech giants have entered the health marketInternet of Things medical device marketA game changer for patients & doctorssize170166014CAGR25%50Medical robot market size2CAGR21%12Bn USDBn USD184030108620410200201820182023Cost savings resulting from these innovations are benefitingpatients and hospitals due to: shorter length of stay less comprehensive pre and post-surgery care improved outcomes(e.g. less complications and human error) 2023Breast cancer detection3 can improve up to 17% whenperformed with AISurgical robots enable more complex procedures withgreater precision and minimal invasivenessSource: 1) MarketAnd Markets; IoT Medical Devices Market by Product (Blood Pressure Monitor, Glucometer, Cardiac Monitor, Pulse Oximeter, Infusion Pump), Type(Wearable, Implantable Device), Connectivity Technology (Bluetooth, Wifi), End User (Hospital) - Global Forecast to 2023; August 2018. 2) MarketAndMarkets; MedicalRobots Market by Product (Instruments & Accessories, Medical Robotic Systems (Surgical Robots, Rehabilitation Robots, Non-invasive Radiosurgery Robots)),Application (Laparoscopy, Pharmaceutical Applications), and Region - Global Forecasts to 2023; Julz 2018. 3) Imagine Technology News; AI-assisted Radiologists CanDetect More Breast Cancer with Reduced False-positive Recall; February 2020 (T1 breast cancer)8Warning: Data relating to the past is provided for information purposes only and is no guarantee of future developments. Forecasts are not a guarantee and candiffer significantly from actual results.
Implications of COVID-199
COVID-19 ImplicationsWhat Does It Mean for the Strategy?Acceleration in future health trends and investment spendingAccelerationof key trendsDevelopments in digital healthcareservices (e.g. Telehealth) anddiagnostics (at-home testing or at thepoint-of-care) will accelerate andcontinue in the long-termFutureinvestmentsThe outbreak will increase therecognition and urgency for moreinvestments in healthcare in bothdeveloped and emerging countries10
COVID-19 ImplicationsWhat Does It Mean for the Strategy?COVID-19 will create winners and losersImpact on healthcareKey solutions in the fight against the virusNear-termLong-termPharmaceuticals- Biotech-- ----- Life Science Tools--- Hospitals-----Managed CareOrganizations--- Med-TechTelemedicinePlayers active in various sub-sectors are makinga difference in people’s live by developing andbringing to the market novel solutions in: Treatments ( e.g. medication) Vaccines Diagnostic devices Consumer health (e.g. hygiene products)Relative ImpactScale: least (1) to most (5), negative (-) and positive ( )Source: Bank J.Safra Sarasin Ltd, as of 30.03.2020.11
Why This Strategy12
How Are We Different From Other Funds?Capture growth opportunities across health trends:1We go beyond the healthcare sector by investing in: TreatmentDiagnostics & PreventionTechnology & InfrastructureOur sustainability expertise:Our sustainable investment approach allows us to:2 Identify emerging health trends Gain superior confidence in our investment cases Limit the risk of fraud, corruption, marketing malpractices andquestionable clinical trialsSource: Bank J.Safra Sarasin Ltd.13
Beyond HealthcareBiotechnologyDiagnosticsPharmaMedical Equipment & ServicesNutrition & IngredientsFutureHealthHealth TechnologySports & FitnessHome Health FacilitiesBig DataSources for logos: wikimedia.org, royalty free for commercial use.Source: Bank J.Safra Sarasin Ltd, as of 30.03.2020.14
Company ExamplesTreatment Dominant player in diabetesmanagement and blood glucosemonitoring Technology leader allowingpatients to have access to realtime glucose data on a smartdevice Sales of USD 1.47bn in 2019 &revenue CAGR of 45% from2011 to 2018Prevention Leading supplier of ingredients,flavors, and nutrition to the food,beverage, and pharma industries Replace ingredients with cleanalternatives such as naturalflavors, as well as reduce sugarand sodium in products Sales of USD 7.2 bn in 2019 &targets organic Volume Growth of4-6% p.a.Tech Provides 24/7 access to doctorsvia phone, video, or app Improve access to critical servicesand reduce cost Improve patient monitoring andcare to underserved communities Strong sale growth of 84%between 2016 & 2018Source: Company Websites and Investor Relations Presentations, as of 30.01.2020. Sources for logos: Dexcom, Kerry, Teladoc Health, Company Presentation, asof 30.01.2020. Investment cases are given for illustrative purpose only and do not constitute an offer, solicitation or recommendation to buy, hold or sell investmentsand does not consider the circumstances of any individual investor. Discrepancies may emerge in respect of our own financial research or other publications of theJ. Safra Sarasin Group relating to the same financial instruments or issuers. The information shown may change without notice.15Warning: Data relating to the past is provided for information purposes only and is no guarantee of future developments.
How we integrate our sustainability approachReducing Risk Delivering ReturnsNot investable/not part of JSSsustainable investment universedue to meaningful GeneticallyModified Organism (GMO)exposure Producer of agrochemicals andchlorine which have known harmpotential to nature and people Furthermore, the acquisition ofMonsanto, a Glyphosate-basedherbicides producer, bearssubstantial legal and reputationalrisks (US lawsuit from 48’6001plaintiffs) Leading and innovative Biotechcompany focusing on cysticfibrosis, a genetic disorderaffecting lungs and the digestivesystem mostly.Its concentration on one raredisease has driven sales growthand ability to maintain a cleantrack record with no history ofrecalls in the past few yearsVertex attracts and retains highlyskilled talents, leading to lowerturnover and giving the companya competitive edgeChanging Behavior US listed global leading providerof real estate capital tohospitals Direct company engagement byJSS analysts/PM’s coversenvironmental and social aspects Key engagement focus onenvironmental riskmanagement in developmentprojects and potential greenlease agreements in order toshare economic andenvironmental benefits betweeninvestor and tenantsAs of 31.03.2020. 1) Source: Bayer Q4/ 19 Results press release. Sources for logos: wikimedia.org, royalty free for commercial use. Investment cases are given forillustrative purpose only and do not constitute an offer, solicitation or recommendation to buy, hold or sell investments and does not consider the circumstances ofany individual investor. Discrepancies may emerge in respect of our own financial research or other publications of the J. Safra Sarasin Group relating to the samefinancial instruments or issuers. The information shown may change without notice. Data relating to the past is provided for information purposes only and is no16guarantee of future developments.
Future Health TeamThematic EquitiesSustainability ResearchPierin MenzliLead Portfolio ManagerTerence McManusPortfolio ManagerHead Thematic Equities PhD in Neurophysiology from theUniversity of Southampton; BSc inPharmacology M.A. HSG, University of St.Gallen Experience as Head of Research Experience as Portfolio Manager &Analyst in Healthcare & Consumersectors Experience as Portfolio Manager &Analyst in Healthcare, IndustryConsultant and Biotech ScientistTeam of 6 Sustainable ResearchInvestment AnalystsResponsible for: ESG & Impact analysis Sustainability methodology Ongoing company monitoring Voting & Engagement Investment Experience: over 11 years Investment Experience: over 16 yearsInvestment SpecialistTomasz GodziekPortfolio ManagerChi Tran-BrändliHealthcare Analyst MSc in Global Financial Markets B.A. in Immunology & Microbiology;Masters in Economics & Finance Doctoral Research Program HenleyBusiness School Experience as Portfolio Manager &Analyst in Technology, IndexEngineer, Quantitative Analyst Experience in scientific research atStanford University and FederalInstitute of Technology (ETH) Zurich Investment experience: 19 years Investment experience: over 9 yearsJoëlle AmramInvestment SpecialistSustainable Equities(5/1)Olivier ClemannHead InvestmentSolutions(15/5)As of 30.03.2020 (Years of Experience / Years with Bank J. Safra Sarasin Ltd).17
Investment Process18
Investment Process4-Step ExposureHighConvictionPortfolioWatchList 5,000 companies 500 companies 80 companies 50 companiesReduce sustainabilityrisksBusiness models alignedwith future health trendsActionable investmentcasesPortfolio construction Proprietary Framework In-house sustainabilityexpertise Assessment ofcompanies’ exposure tofuture health trends Idea generation on thebasis of health trends &sustainability insights. Cross-sector expertise KPI-driven investmentcases Concentrated anddiversified Continuous Risk &Performance controlSource: Bank J. Safra Sarasin Ltd, as of 31.03.2020.19
Strategy Characteristics20
Current PositioningTop 10 HoldingsThematic Allocation in %AssetWeight in %Astrazeneca Plc3.27Sanofi SA3.14Amgen Inc2.90GlaxoSmithKline Plc2.88Novo-Nordisk A/S -B-2.82Merck & Co Inc2.81Anthem Inc2.68Danaher Corp2.49Thermo Fisher Scientific Inc2.47Abbott Laboratories2.46Data as of 31.03.2020Prevention &Diagnostics18.1%Treatment59.5%Tech &Infrastructure22.4%Data as of 31.03.2020Source: Bank J. Safra Sarasin Ltd.All allocations are subject to change without notice.21
Current PositioningGeographical allocation in %Sector allocation in %Daten per 31.03.2020Data as of derlande1.8Übrige1.1Health Care78.7Consumer Staples8.5Inform.Technology7.3Real Estate3.2Communication Services1.5Consumer Discretionary0.9Source: Bank J. Safra Sarasin Ltd.All allocations are subject to change without notice.22
ESG and CO2 Portfolio MetricsESG Portfolio OverviewPortfolio Issuer RatingtCO2 / M InvestedFinancialsInformation Technology80Communication ServicesHealth Care60Consumer StapleslowConsumer DiscretionarylowIndustry RatinghighReal Estate40IndustrialsEnergy20Materialsl Holdings PortfolioUtilities0Future HealthMSCI WorldSource: Bank J. Safra Sarasin Ltd, as or 31.03.2020.All allocations are subject to change without notice.23
Opportunities and Risks24
JSS Sustainable Equity – Future HealthOpportunities The Fund allows investors to participate in athematic investment approach in listed equitiesacross market capitalizations and without anyrestriction as to the issuer's domicile.The Fund invests in leading companies and nicheplayers whose products and services contribute tothe improvement of health outcome and thedampening of rising healthcare costs. The Fund mayalso invest in companies outside of the healthcaresector which are exposed amongst others tonutrition, activity, senior living and health relatedtechnology trends.The Fund capitalizes on a large in-house team ofinvestment professionals combining financial andsustainability expertise.The Fund’s investment team has a proven trackrecord in thematic investment strategies.Risks Investments in the Fund can fluctuate in value, andthere is no guarantee that the shares can be sold forthe original capital amount invested.If the Reference Currency differs from the Fund’sInvestment Currency(ies), a currency risk exists.The Fund invests in equities; its performance isprimarily influenced by company-specific changesand changes in the economic environment.Through the use of borrowing or derivatives aleverage effect can be achieved, which can trigger acorresponding increase in price fluctuations.Investments in growth sectors or in small and midcaps carry higher price risk.The portfolio may hold emerging market equities:these are at an early stage in their development andsubject to an increased risk of expropriations,nationalisations and social, political and economicuncertainty. Compared with developed marketsinvestments in emerging markets entail increasedrisks in the form of liquidity squeezes, sharpcurrency and price fluctuations, currency export.As of 19.02.2020. The risk and reward profile shown is based on the share class P USD acc. Risk and reward profiles of other share classes are included in theKIID of the specific share class. Risk and reward profiles are based historical data and can not be used as a reliable indicator of the future risk profile of a shareclass. The risk classification of the share class may change over time and is not a guarantee.25
Fund Details26
JSS Sustainable Equity – Future HealthName of fundJSS Sustainable Equity - Future HealthFund domicileLuxembourgLegal structureSICAV according to Luxembourg law / UCITSInvestment Company /Fund Management CompanyJ. Safra Sarasin Fund Management (Luxembourg) S.A., LuxembourgPortfolio managementBank J. Safra Sarasin Ltd, BaselDepositaryRBC Investor Services Bank S.A., LuxembourgShare classPAccounting currencyUSDCurrency share classesUSD, CHF and EURBenchmarkno representative benchmark availableClient segmentPrivate ClientsManagement fee p.a.1.60%Minimum subscriptionP (None)LiquidityDaily subscription and redemption of fund shares.Authorisation for saleSwitzerland, Luxembourg, Germany, Netherlands, Gibraltar (not for CHF fund share classes), Great Britain,Italy, Singapore (qualified investors) and Monaco*Share classes /ISIN /Securities-No.P CHF acc / LU2041625497 / 49498046P EUR acc / LU2041625141 / 49498037P USD acc / LU2041624920 / 49491423P CHF dist / LU2041625570 / 49498099P EUR dist / LU2041625224 / 49498038P USD dist / LU2041625067 / 49491438As of 31.03.2020Further details are included in the JSS Investmentfonds SICAV II prospectus.27
Important Legal InformationSwitzerlandThis document constitutes marketing material. If it refers to a financial instrument for which a prospectus and/or a key investor/information documentexists, these are available free of charge from Bank J. Safra Sarasin Ltd, Elisabethenstrasse 62, P.O. Box, CH-4002 Basel, Switzerland.This document has been prepared by Bank J. Safra Sarasin Ltd (“Bank”) for the sole use of the recipient only. The information and descriptions ofthe investment product contained in this document are intended purely for information purposes and do not constitute financial, legal or tax adviceand/or any other recommendation, offer or solicitation to acquire or sell investment products, to engage in a transaction, or to conclude any type ofbusiness, nor are they any substitute for, in each individual case, obtaining the necessary advice and information on risk from your professionaladvisor to an extent which you consider appropriate and reasonable, in order to ensure that the transaction is appropriate and suitable to yourfinancial goals and circumstances.This document is based on publicly available information and data (“the Information”) believed to be correct, accurate and complete. The Bank hasnot verified and is unable to guarantee the accuracy and completeness of the Information contained herein. Possible errors or incompleteness of theInformation do not constitute legal grounds (contractual or tacit) for liability, either with regard to direct, indirect or consequential damages. There isno obligation on the part of Bank or any other person to update the content of this document. The views and opinions contained in this document,along with the quoted figures, data and forecasts, may be subject to change without notice.The collective investment fund described in this document is a subs-fund of JSS Investmentfonds II, SICAV. JSS Investmentfonds II is a UCITSorganized as an open-ended investment company (société d’investissement à capital variable – “SICAV”) regulated by the Commission deSurveillance du Secteur Financier (“CSSF”). It has been authorized for marketing in Switzerland by the Swiss Financial Market SupervisoryAuthority FINMA.The price and value as well as any income that might accrue of any financial instrument mentioned in this document may move upwards ordownwards.Past performance is no indication of current or future performance. The performance shown does not take account of any commissions and costsincurred on the issue and redemption of units. Such costs and commissions have a negative impact on the performance of the fund. Informationcontaining forecasts are intended for information purpose only and are neither projections nor guarantees for future results and could differsignificantly for various reasons from actual performance. Investments in foreign currencies are subject to exchange rate fluctuations. Exchange raterisk will apply if the investor’s reference currency is not the same as the investment currency.SICAV II28
Important Legal InformationSwitzerlandInvesting in this fund entails risks which are outlined in the prospectus. The latest available prospectus as well as the Key Investor InformationDocument “KIID” should be carefully read and an independent consultant should be consulted before considering any investment. The abovementioned documents, the articles of incorporation as well as the annual and semi-annual reports are available free of charge from the paying agent(Bank J. Safra Sarasin Ltd, Elisabethenstrasse 62, P.O. Box, CH-4002 Basel, Switzerland) or the Swiss representative (J. Safra SarasinInvestmentfonds Ltd, Wallstrasse 9, CH-4002 Basel, Switzerland).The Bank and/or an affiliate of the J. Safra Sarasin Group, its clients and/or officers may hold a position or engage in transactions in any of thefinancial instruments mentioned.The Bank does not accept any liability whatsoever for losses arising from the use of the Information (or parts thereof) contained in this document. Inparticular, neither the Bank nor its shareholders and employees shall be liable for the views contained in this document.This publication is intended only for investors in Switzerland. It may only be distributed in countries where its distribution is legally permitted. Thisinformation is not directed to any person in any jurisdiction where (by reason of that person’s nationality, residence or otherwise) such offering isprohibited. Shares/Units of this fund may not be offered, sold or delivered to persons domiciled in the USA, US nationals or US person as defined byFATCA-rules. Consequently, services and/or products mentioned in this document may not be available in all countries. Interested parties shouldcontact the local J. Safra Sarasin Group-representative to be informed about the services and products available in their country of residence. Copyright Bank J. Safra Sarasin Ltd. All rights reserved.Bank J. Safra Sarasin LtdElisabethenstrasse 62P.O. BoxCH-4002 BaselT: 41 (0) 58 317 44 44F: 41 (0) 58 317 44 00www.jsafrasarasin.comSICAV II29
For further information please contact usBank J. Safra Sarasin LtdElisabethenstrasse 62P.O. BoxCH-4002 BaselSwitzerlandT: 41 (0)58 317 44 44F: 41 (0)58 317 44 00www.jsafrasarasin.ch
Market by Component Software & Services (RPM, RTM), Application (Teleradiology, telestroke, teleICU), Hardware (Glucose Meters), End-User (Provider, Payer, Patient), Delivery Mode (On-Premise, Cloud) Trends & Global Forecast to 2025; March 2020. 2) PR Newswire; The Global Health and Wellness Food MARKET is . JSS Sustainable Equity -Future .
