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U.S. - ENAs of time of writing, Donald Trump and the Republican Party appear to have secured a strong governing mandate from U.S. voters. Stock markets reacted positively immediately following the news, as Trump campaigned on a pro-growth agenda, emphasizing lower taxes and deregulation. However, his rhetoric on new tariffs and reopening trade agreements, together with prospects for higher government spending, sparked a sell-off in long-term Treasury yields. The longer-term impact on inflation, fiscal deficits, and tariffs will ultimately depend on the specifics of the new administration’s policy implementation, which will become clearer over time. While it remains too early to predict how the markets will adjust to prospective policy changes, on balance, global monetary and fiscal policy are likely to remain a tailwind to growth. We will continue to monitor events closely and provide further analysis as we reassess our views on the global economy and financial markets.
Meanwhile, the Bank of Canada delivered its fourth consecutive rate cut on October 23rd and the Federal Reserve is expected to lower its policy rate at forthcoming meetings, confirming that the monetary easing cycle is well underway. Despite mixed performance in the month of October, equities generated strong positive returns year-to-date as market consensus continues to converge on an economic soft-landing scenario. The total return from the beginning of the year to October 31st for the S&P 500 was 27.9% (in Canadian dollars), while the S&P/TSX rose 18.2%, the MSCI ACWI 22.6%, the MSCI EAFE 15.8%, and the MSCI Emerging Markets 18.5%.
Our investment approach is focused on achieving results over a longer-term horizon, and our portfolios are structured to capture value across all environments. We aim to avoid reacting to short-term shifts in market sentiment and we focus on opportunities with sustained potential for innovation and growth. This commitment is particularly evident in our healthcare investments and here, we highlight our exposure to select leading companies that are actively addressing one of the most pressing global health challenges: cancer.
Investing in the Fight Against Cancer
Cancer remains a significant global health challenge, affecting 1 in 3 people at some point in their lives[1]. Each year, over 19 million new cases are diagnosed, and nearly 10 million people succumb to the disease, making it the second leading cause of death worldwide[2]. It is estimated that 155 million people are living with cancer globally, 34 million of which are in North America[3]. As the complexity of cancer is uncovered—with over 100 different disease types—so too are the opportunities to advance treatment and improve patient outcomes.
Cancer is fundamentally a disease of the genome, where normal cells accumulate mutations that drive uncontrolled growth and evade immune detection. This complexity demands cutting-edge solutions, from genome sequencing to developing targeted therapies and immunotherapies. Through carefully investing in select healthcare innovators, we are supporting advancements in cancer treatment, while positioning our portfolio for sustainable, long-term value creation.
Spotlighting Our Healthcare Holdings
Our focus on meaningful growth potential is reflected in several companies leading advancements in oncology. Below are some of our key holdings in this effort:
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Moderna’s share price peaked in 2021, following the introduction of COVID-19 vaccines. A 75% share price drop presented us with an attractive entry point in late 2023, and we have been gradually increasing our investment since then. Moderna has developed personalized cancer vaccines, a new approach to immunotherapy, that train the immune system to target certain antigens present on cancer cells. This treatment is tailored to each patient and has shown a 49% reduction in the risk of recurrence in high-risk melanoma patients. Moderna, in collaboration with Merck’s Keytruda, has expanded this approach to other oncology indications.
Moderna is actively expanding its list of indications with their personalized cancer vaccines. |
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Illumina is the leader in genome sequencing technology, enabling fundamental research and development of personalized cancer treatments. We recently introduced Illumina into our portfolio, following an 80% share price drop from its peak three years earlier. The company has drastically lowered the cost of sequencing through innovation and multiple product cycles, accelerating research and development of therapies. Illumina’s innovations have brought the cost per genome down to just $200—a dramatic reduction from the nearly US$3 billion required to sequence the first human genome in 2003 by the Human Genome Project.
Illumina’s underlying sequencing volumes have been growing at 20-40% annually, driving an increase in sales from $2.2 billion in 2015 to $4.5 billion in 2023, with this volume growth more than offsetting the price reductions per gigabase. Illumina currently trades at 35 times 2025 earnings and is forecasted to grow earnings per share at a 64% compound annual growth rate (CAGR) from 2023 to 2027. |
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Merck, an innovator in the novel field of immunotherapy has brought forth a game-changing solution. In simple terms, immunotherapy is a treatment that helps the body’s immune system recognize and fight diseases, like cancer, by boosting or guiding its natural defenses. In Merck’s case, Keytruda is a PD-1 inhibitor that re-enables immune cells to attack cancerous tumours. Keytruda has been shown to significantly improve patient outcomes and is now a standard therapy in a large and growing list of cancer indications.
Since we initiated our position in 2015, Merck’s sales of Keytruda have grown from $566 million to $28 billion in 2024. Merck currently trades at 10.7 times 2025 earnings, with earnings per share forecasted to grow at a 65% CAGR from 2023 to 2027. |
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Gilead has developed cell therapies, through its subsidiary Kite Pharma, which take a different approach to immunotherapy. Its CAR-T cell product, Yescarta, has revolutionized treatment for blood cancers, such as lymphoma, by genetically modifying a patient’s T-cells and reintroducing these modified cells in the patient to attack tumour cells. Yescarta has achieved durable remission in patients with advanced lymphoma, with potential expansion into other cancers.
Sales generated from Gilead’s CAR-T products have grown from $264 million in 2018 to $2.1 billion in 2024. Moreover, the company has reduced their cost per therapy by 50% between 2019 and 2023 while treating more than 23,000 patients to date. Gilead currently has five approved indications and twelve active clinical trials. Gilead currently trades at 12.3 times 2025 earnings and is forecasted to grow earnings per share at a 5% CAGR from 2023 to 2027. |
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As a result of the success of Pfizer’s COVID-19 vaccines and treatments, the company was able to acquire Seagen in a $43 billion all-cash deal. Seagen is a world leader in the development and commercialization of innovative antibody-drug conjugates (ADCs), which combine the cellular toxicity of chemotherapies with the specific targeting abilities of antibodies to destroy cancer cells, while minimizing damage to healthy cells.
Seagen’s second approved ADC, Padcev, is expected to generate sales of $1.5 billion in 2024, with projections indicating growth to over $4 billion in 2028. Pfizer currently trades at 6 times 2025 earnings, with earnings per share forecasted to grow at a 13% CAGR from 2023 to 2027. |
In addition to the companies mentioned above, our healthcare holdings also include Roche, AbbVie, Sanofi and Profound Medical, all of which are actively engaged in advancing oncology research and treatments.
Concluding Thoughts
The pace of innovation in healthcare continues to accelerate, with the tools to combat cancer becoming more sophisticated and personalized. The pharmaceutical industry is laser-focused on finding cures and treatments for diseases that afflict humanity, but these efforts demand substantial investments and are not always successful. However, when breakthroughs occur the benefits are enormous, helping patients and rewarding innovative companies with significant profits and share price gains. While significant progress has been made, the fight against cancer is far from over, presenting ongoing opportunities for investment in treatments that improve outcomes and save lives. Our portfolio companies are driving this transformation, and through our investments, we are positioned to participate in this progress in a way that benefits both society and our clients. Through our targeted investments in healthcare leaders, we are poised to capture enduring value in a sector that remains essential, regardless of short-term market shifts.
Where the information contained in this presentation has been obtained or derived from third-party sources, the information is from sources believed to be reliable, but the firm has not independently verified such information. No representation or warranty is provided in relation to the accuracy, correctness, completeness or reliability of such information. Any opinions or estimates contained herein constitute our judgment as of this date and are subject to change without notice.
Past performance is not a guarantee of future returns. All investments pose the risk of loss and there is no guarantee that any of the benefits expressed herein will be achieved or realized.
The information provided herein does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. There is no representation or warranty as to the current accuracy of, nor liability for, decisions based on such information.
Certain information contained in this document constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “target,” “project,” “estimate,” “intend,” “continue” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of the strategy(ies) may differ materially from those reflected or contemplated in such forward-looking statements.
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