Fidelity’s Allyson Ke believes many Europe-based companies focused on health and wellness have the potential to thrive, driven by innovation, consumer demand and favorable market dynamics.
From groundbreaking innovation in biotechnology to everyday consumer products like mineral water, Europe is brimming with investment opportunities amid growing global demand for all things aiding health and well-being, according to Fidelity’s Allyson Ke.
“The region’s healthy-living market has flourished against a backdrop of favorable macroeconomic conditions,” explains Ke, who co-manages Fidelity® Healthy Future Fund (FAPHX) with Paul McElroy. “Diverging interest rates between the U.S. and Europe, coupled with the absence of import tariffs for local consumers, have created a unique environment for attractively priced European companies aligned with our strategy to thrive.”
Launched in May 2022, the thematic equity strategy is dedicated to investing in global health and wellness companies. A major theme for the portfolio is not only investing in innovative health care companies that improve life expectancy, but also locating well-priced stocks across all sectors that seek to improve and enhance the quality of people’s lives and well-being, in addition to decreasing negative environmental impacts to improve global health.
Ke believes that as Europe continues to lower interest rates and avoids tariffs, European consumers and firms could benefit.
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She adds that the recent weakening of the U.S. dollar versus the euro has presented a timely opportunity to diversify the fund’s holdings.
As an example, she cites French food giant Danone (GPDNF), a pioneer in health-focused consumer goods known for its yogurt and Evian water brands. “The firm has enhanced its product offerings with higher-protein content and by incorporating probiotics into the latter to support gut health, while simultaneously improving its return on capital,” says Ke.
Still, she notes, despite Danone’s global reputation, the stock looks considerably undervalued compared with its U.S. peers.
Turning to the health care sector, Ke points to the fund’s stake in UCB (UCBJF), a Belgium-based biopharmaceutical firm specializing in neuroscience and immunology. The drugmaker offers treatments for complex conditions, including psoriasis, Crohn’s, Parkinson’s and epilepsy.
“Paul and I see strong growth potential here, particularly with Bimzelx®, UCB’s psoriasis medication, which, despite a delayed launch, has rapidly gained market share by already capturing almost 10% of a roughly $25 billion market for the condition,” says Ke. “With total estimated peak Bimzelx drug sales of over $6 billion and the possibility of doubling revenue within that class of drugs over the medium term, this is not just a drug, it’s a potential game-changer.”
Between shifting market dynamics and businesses embracing wellness-focused innovation, Ke believes the time is ripe to lean into companies that are committed to both improving lives and creating meaningful value for shareholders.
For specific fund information, including full holdings, please click on the fund trading symbol above. Securities mentioned were fund holdings as of May 31.
Allyson Ke is a portfolio manager and analyst in the Equity division at Fidelity Investments.
In this role, Ms. Ke manages Fidelity and Fidelity Advisor Healthy Future Fund and Fidelity Nordic Fund. Additionally, in her responsibilities as an analyst, she covers the European consumer staples sector.
Previously, she managed Fidelity and Fidelity Advisor Europe Fund. She also covered the European consumer discretionary sector and managed a European consumer discretionary pilot fund.
Prior to joining Fidelity in 2011, Ms. Ke worked in investment banking at Goldman Sachs. She has been in the financial industry since 2006.
Ms. Ke earned her Bachelor of Arts in philosophy from Cambridge University and her Master of Business Administration from Harvard Business School. She is also a CFA® charterholder.