With the human tragedy ongoing in Ukraine, much in this video will sound extremely secondary in nature and we wish nothing more than the war to end soon!
Fear and uncertainties are dominating the financial markets and in such a setting, investors are looking to protect their assets. Hi, it’s me again, Flavio from Kieger.
Healthcare, is a sector that is typically considered a defensive area of the market. Why is that? Well, patients continue to need their medications and therapies, no matter what happens. Thus, Healthcare revenue growth has one of the lowest correlations to global GDP growth. Healthcare over the past decades was able to outperform global equities as our chart of the month shows. The chart shows the Maximum Drawdown of the MSCI World and compares the MSCI Healthcare performance over the same time period.
At the beginning of the new millennial, as the dot-com bubble burst, Healthcare outperformed global equities by 36%. Years later, during the global financial crisis, Healthcare was 20% better than global equities. More recently, during Covid Healthcare outpaced global equities by 7%. Today, during the invasion of Ukraine, Healthcare was 3% better than global equities. While healthcare is outperforming on a relative basis, the sector is not immune against downturns. But for us as investors, this opens up great opportunities to buy high quality growth stocks which otherwise would have been too expensive.
Thank you for watching and once again, let us hope that this war will end soon.
Did you know that R&D expenses of the 15 biggest pharma companies have increased by almost 50% since 2016 to USD 133 bn in 2021? And expenses will continue to increase. Roche alone for example will spend close to CHF 15 bn on R&D in 2022, 1 bn more than in 2021.
We attended the ESMO (European Society for Medical Oncology) annual oncology congress in Paris from Sept. 9-13. We came away very positive from the meeting, though two souls remain in our chest. On one side we see the amazing potential and the opportunities for new oncology therapies. On the other side complexity seems to potentially increase and so does competition in the space. But what to do as an investor? Find some proposals in our ESMO Thoughts from the Street.
September is traditionally one of the most important conference months, as second quarter reporting is largely complete and third quarter reporting has not yet started. We attended the 19th annual Goldman Sachs European Medtech and HC Services Conference 2022, held in London on September 7-8, again in a physical setting. While we remain mindful of all the sector headwinds, we left the conference more convinced that there are selectively attractive investment opportunities at current levels.