In times of market stress, recession fears and contracting market valuations, it is important to take a step back and look at the big picture. Good to see you again.
Recession means decreasing GDP, decreasing revenues and probably decreasing earnings, however, some sectors are much more resilient than others.
Our chart of the month shows the correlation between World GDP growth and sector sales growth. This is from 1996 until 2021.
And one can see, with the exception of Financials that have been massively distorted by the Global Financial Crisis, that over the past 26 years Healthcare experienced the lowest correlation between global GDP growth- and sales growth. This number is even more impressive, when comparing it to overall World Equities, where correlation is way higher at 0.83.
While other sectors’ sales growth is simply a function of GDP growth, Healthcare has unique drivers that allow the sector to grow even during difficult market environments. The most important ones are:
If you wish to know more about our Healthcare Investment Strategies, do not hesitate to contact us.
What mattered this month in healthcare? The readout of the SELECT study was the single biggest healthcare event of the month. The results may open the door to wide reimbursement for GLP-1 weight-loss drugs. This led to an overreaction with significant price movements amongst many companies as markets just made blanket assumptions of a healthier, thinner world. Find out more in our monthly healthcare newsletter.
Remarkable Strides in Breast Cancer Survival: A Look at the Last Few Decades 🎗️📈 Intersted in knowing more? Check out Maria Specogna’s latest chart of the month video!
What mattered this month in healthcare? Second quarter earnings season kicked off to a strong start, with earnings overall better than estimates. However, positioning matters, and strong numbers were not always enough if expectations were high. Find out more in our monthly healthcare newsletter.