| "Run A Marathon When You're A Hundred!" |
Improving and extending the quality of life. That's a big part of what's involved in life sciences. At its present stage, it means developing drugs that can cure fatal diseases like Aids and Cancer. And with the Human Genome Project soon to be completed, scientists will be able to know so much more about a person's future medical condition from the minute they are born. They will also be able to accurately predict which segment of the population will become vulnerable to certain diseases. It also offers the potential to tailor make drugs so that they will be extremely effective in treating a specific condition. The process of ageing will be very different too. According to Country Head of Sales at Franklin Templeton Investments, Mark Browning, "age is going to be immaterial". Being 50,60,70 years old doesn't matter, he says, adding that it's your functionality that will be important. "With life sciences, the advances that are going to be made over the next decade is not the fact that you will be living to a hundred, it's the fact that you going to be fully operational at that age. So you will be able to run a marathon at age 100." It's not surprising that life sciences industry has been touted as the next big thing after the internet. To tap the potential of this growth industry, Franklin Templeton Investments today launched a life sciences unit trust - the first here.
| CPF Approved - Narrowly Focused And Higher Risk |
The feeder fund is CPF approved and is classified as narrowly focused and higher risk. It's modelled on the Franklin Biotechnology Life Sciences Discovery Fund launched in the US 2 years ago. The same team of fund managers that run the US fund will also be in charge of the feeder fund. The track record of the US fund has been impressive. Last year, it was named top biotech fund in the US by Lipper Analytical Services. It posted a return of 98%. And for the first half of this year, it's gone up another 96%. Over a one year period ending 21 June 2000, the fund has returned 212%. Most of the companies that the fund invests in are based in the US.
| "Don't Invest In Biotechs That Dream Up Drugs |
One drawback however, is that biotechnology stocks are very volatile. Listed on the NASDAQ, they suffered heavily during the recent correction in March. The stocks are off their earlier highs and the sector has cooled somewhat. Lead fund manager Kurt Von Emster expects prices to come down further later this year. In the meantime, he has a strategy in place that he believes counteracts the heavy risk involved in investing in biotechnology stocks. The fund invests heavily in established companies with solid research and development expertise, and those that have a solid management team and very good earnings potential. These are companies with products either on the market now, or in the late clinical stages. And pharmaceutical giants are in a much better financial position, for if one drug fails, they have plenty of other products to rely on. Such companies suffered comparatively less when the market was down in March as they were still churning out sizeable profits. That is why Mr. Von Emster investment philosophy is - "Don't invest in biotechs that dream up drugs, go for the giants that sell them."
Mr. Von Emster, who has 11 years of experience in the life sciences industry, feels the long term prospect for the sector is good. He is bullish on a bunch of drugs that should be available soon. These include a vaccine to prevent the recurrence of skin cancer by Bristol-Myers Squibb, and an improved version of the allergy fighting drug, Claritin. While Franklin Templeton is optimistic about the long term prospects of the fund, it claims the volatility of biotechnology stocks makes it difficult to estimate the fund's possible returns next year. However at this morning's news conference, Mark Browning did say that he would be happy if the fund returned around 20%. And he's confident that 100 million dollars can be raised from the launch in Singapore.
Launch Date - 26 June - 28 July 2000
Launch Price - 10 Singapore Dollars per unit
Minimum Initial Investment - 1000 Singapore Dollars
Minimum Subsequent Investment - 500 Singapore Dollars
Initial Sales Charge - 5%
Discount - Up to 2.5% of bonus units (depending on amount invested)
Annual Management Fee - 1.9%
CPF Approved - Yes
Sector Allocation (indicative) -
76.1% in Health and Personal Care
5.7% in Business and Public Services
3.9% in Electronic Components & Instruments
2.5% in Data Processing and Reproduction
11.8% in Short-term liquidity instruments
Region Allocation (indicative) -
76.1% in United States
3.7% in the Netherlands
2.6% in the United Kingdom
2.3% in Canada
11.8% in global short-term liquidity instruments