Yes, BBH has been underwhelming for a while now and the factsheets, while entertaining at times, have become a bit monotonous of late and potentially a distraction for the managers. I must admit I missed the change with the directors fees so thanks for pointing that out.

The managers often point to the small and mid-cap focus being the main reason for lagging the healthcare index. That seemed to be the case a while ago and they also stayed away from the likes of Moderna during COVID and GLP-1 drugs more recently which hurt returns versus the benchmark as well. But I probably need to look more closely at the underperformance again to see whether that explanation still holds up. They have stuck to their guns with the ‘changing nature of health care’ strategy and I still like that idea as an overarching theme.

It’s still a sizeable trust so I’m not too worried if it shrinks a little more and I think there was a bit of discount at the last redemption point as it was near the autumn lows last year so that may have caused some folks to cash in for a quick uplift.

However, my biggest concern is BB Healthcare, which is in your portfolio. I attended the last AGM, and, along with several other shareholders, was unimpressed by the management’s answer to the trust’s persistent poor performance.

The managers’ monthly fact sheets are far too woffly, and I was surprised to find in a note to BBH’s accounts (page 48) that the directors have abandoned taking their fees in the form of shares, and are now going to be paid in cash. The decision has been made “in order to continually attract high quality and diverse candidates as non-executive directors”. It is rare for a trust to pay its directors fees in shares, and this is one of the reasons that attracted me to the trust in the first place.

In a bid to control its discount the trust offers an annual redemption option to its shareholders. Last year, some 14.3% of the trust’s share were redeemed and given the long-term underperformance relative to the MSCI World Healthcare Index, it would be surprising if a substantial number of shareholders did not take advantage of the annual redemption facility to reduce the size of the trust even more later this year.

It was encouraging to see that Saba, an activist investor, popped up on the share register with a 5% stake in April. Perhaps they will shake things up.

Given that BBH is backed by a specialist Swiss healthcare investor I still hope that BBH will eventually come good. But am beginning to think I should swallow my losses and switch into Polar Capital Global Healthcare.

Would be interested in your verdict on BBH.