SECTOR UPDATE
The NASDAQ Biotech Index rose by over 10% in October, propelled higher mainly by favourable corporate data in 3rd quarter reports and promising results disclosed at scientific conferences. Amgen and Idec presented their latest data on clinical studies on the treatment of rheumatoid arthritis and other illnesses, for example. The U.S. pharmaceuticals company Merck was granted a licence by the U.S. Federal Drug Agency FDA to market a cholesterol lowering medicine, and Genzyme reported that its application for approval of a drug to treat a hereditary disease will be decided at a meeting in January 2003.
MOTHERFUND'S PERFORMANCE
From the start of the year until the end of October, the motherfund lost 41.22% in value, while its benchmark declined by 45.90% in the same period. The superior performance of the motherfund was due to its concentration on established biotechnology companies with a broad range of products and stable earnings. The feeder fund's (the fund that's available in Singapore) performance is shown in the following table (figures are as 30 Sep 2002).
DRESDNER INTL GLOBAL BIOTECH FUND'S CUMULATIVE PERFORMANCE*
|
| Fund (%) | Benchmark** (%) |
| Year-to-date | -42.02 | -45.25 |
| 1-month | -7.54 | -3.73 |
| 3-month | -8.84 | -8.77 |
| 6-month | -36.33 | -38.00 |
| 1-year | -32.54 | -33.59 |
Source: Allianz Dresdner Asset Management
*Cumulative returns based on bid-to-bid prices, returns reinvested, and in Singapore dollars.
** Benchmark is 75% Nasdaq Biotech Index 25% MSCI Pharma Index PORTFOLIO HIGHLIGHTS
We continued to adhere firmly in October to our investment strategy of concentrating on profitable biotechnology companies with products that are at an advanced stage of development. Amgen, one of the five largest positions in the portfolio, presented good results for the 3rd quarter and also held out the prospect of sales growth for its two principal products.
OUTLOOK
Numerous innovative pharmaceutical products have been submitted to the U.S. Food & Drug Administration (FDA), some of which are likely to be approved for sale in the near future. Several other drugs are close to the marketing stage. Additional impetus should come from the scientific conferences being held this year, and publication of the latest research results.
In the medium to long term, the knowledge derived from the decoding of the human genome will open up the prospect of cures being found for hitherto incurable diseases, with corresponding opportunities for market success. Although companies require protracted periods of research for this purpose, successful products enjoy lengthy patent protection. This should enable a growing number of biotechnology companies to attain profitability in future.
Related Reports:
Biotech 3Q Won't Sparkle, But Market Bottom Possible
JP Morgan Strategist Says Give Biotech A Look
3Q Earnings Summary Of Some Popular Biotech Stocks
This report is prepared by Deutscher Investment Trust (dit) and strictly for information purposes only and should not be considered as an offer or solicitation to buy or sell units in the Dresdner International Provident Funds ("the Fund"). Investments in the Fund are not obligations of, deposits, or guaranteed by the Allianz Dresdner Asset Management Singapore Ltd and are subject to investment risks, including the possible loss of the principal amount invested. Prices of units and the income from them may fall as well as rise and cannot be guaranteed. Past performance is not necessarily a guide to future performance. All applications for units in the Fund must be made on the application form accompanying the prospectus. Investors should read the prospectus for details on the Fund. Any forecasts made are not necessarily indicative of future or likely performance of the fund. Please note that any representations as to the performance of the Fund is limited to the extend that the returns for the Fund is calculated for a period that is less than 3 years. 
CPFIS Registered Investment Administrator
