Effective date: 31/07/2026The portfolio rose by +4.28% over the month, compared to +4.37% for its benchmark index, resulting in a limited underperformance of -5 bps. The two-factor Brinson attribution highlights a positive sector allocation effect (+35 bps) fully offset by a negative selection effect (-40 bps). The month was dominated by the second quarter earnings season, which was generally positive, in a sector that nevertheless continues to lag the market since the start of the year (median performance of medical devices negative versus a sharply rising S&P 500). Tariff uncertainty related to the Section 232 investigation on medical devices and consumables continued to weigh on the stocks most exposed to imports. The currency effect was neutral: the euro ended almost unchanged against the dollar, around 1.145-1.15.
SEGMENT ANALYSIS
Dialysis/Blood (+21.8 bps, best contributor) – This segment posted the strongest growth in the portfolio (+18.6%) and was overweighted (6.2% vs 4.6%). DexCom was the almost exclusive driver, complemented by Insulet (+7.9%). The bet on continuous glucose monitoring paid off fully.
Orthopedics (+4.4 bps) – The only segment where selection was positive (+4.5% vs +4.2% for the index). Enovis (+39.9%) and Ottobock (+10.4%) offset the absence of Zimmer Biomet (+8.4%), which alone cost 8 bps.
Cardiology/Neurology (-10.3 bps) – The heaviest segment in the portfolio (24.7% vs 19.3%) but the most penalizing. The very strong contribution from AtriCure and Merit Medical was not enough to offset the underweight in Medtronic and the declines in Lantheus, Edwards, LivaNova (-3.2%) and iRhythm (-2.1%).
Imaging/Radiotherapy (-9.8 bps) and Consumables (-9.7 bps) – Two segments penalized by selection: Philips erased the good performance of Siemens Healthineers (+7.8%) and GE HealthCare (+5.6%), while the underweight in Becton Dickinson (+8.8%, 2.5% vs 4.5%) weighed on consumables.
Surgery (-9.3 bps) – Segment down 8.2%, dragged down by Intuitive Surgical and PROCEPT BioRobotics (-18.1%, against a backdrop of slowing Aquablation adoption, constrained hospital budgets, and a class action lawsuit). Coloplast (+15.3%) limited the damage. Selection was positive here (+10.8 bps), as the portfolio held up better than the index.
Diagnostics (-1.3 bps) and Non-invasive (-1.3 bps) – Almost neutral. Diagnostics posted the second-best absolute performance (+12.0%) thanks to Abbott and Thermo Fisher. In non-invasive, the marked underweight in ResMed (0.7% vs 3.4%) and the absence of Fisher & Paykel cost 13 bps, offset by Sonova (+13.5%) and the non-holdings of Cooper Companies and Medline.
More generally, off-benchmark bets on small and mid caps (AtriCure, Merit Medical, Thermo Fisher, Enovis) contributed nearly +90 bps of cumulative relative effect and demonstrate the added value of the broader universe; the overweight in DexCom and the underweight in HOYA (+5 bps) also paid off. Meanwhile, the portfolio remains structurally underexposed to the large defensive caps in the index (Medtronic, Abbott, Becton Dickinson, ResMed, Zimmer Biomet), a bias that cost about -55 bps in a month when these stocks reported strong results. Furthermore, high-volatility convictions work both ways: Lantheus and PROCEPT detracted 31 bps. Finally, it is worth noting the case of Edwards Lifesciences, whose 5.5% decline cannot be explained by the July 23 earnings release (results above expectations, raised guidance, target price upgrades at JPMorgan and Leerink): this discrepancy is more likely due to profit-taking than to a deterioration in fundamentals, which argues for maintaining the position.
After a sharp decline since the start of the year, medtech now presents an interesting paradox: valuations have contracted sharply, sometimes excessively, while operational fundamentals remain generally solid. This correction seems to reflect more a rotation by investors in favor of AI, a temporary questioning of the sector’s defensive nature, and increased market selectivity towards certain quality franchises, rather than a structural deterioration in demand. As a result, there are now more attractive entry points for several leaders, now valued at significant discounts to their historical levels, even as organic growth remains robust and product catalysts are still very much present. Fundamentally, the sector continues to benefit from resilient procedure volumes, supported by demographic aging, innovation, and the gradual shift to outpatient care. On the other hand, hospitals remain cautious in their equipment spending, due to staffing constraints and stricter budgetary trade-offs. In this context, solutions with high return on investment, minimally invasive devices, and platforms capable of gaining market share in alternative care sites retain a clear competitive advantage. A true trend reversal, however, would require investors to be convinced that the guidance revisions seen this quarter represent a low point, and that the next earnings season will open the way to a more favorable beat-and-raise sequence. Added to this is an innovation cycle that is gradually regaining visibility after being disrupted by covid, while the main risks remain well identified: persistently high rates, pricing pressures, regulatory uncertainties, reimbursement issues, and potential trade tensions.