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.
We attended the ASCO 2023 annual meeting in Chicago. After the rise of immuno-oncology, COVID-19 challenged clinical trial execution and muted patient numbers. In the last years we saw many setbacks of once promising immuno-oncology combinations trials.
What mattered this month in healthcare? Q1 reporting came to a close, and FTC action put pressure on the biopharma space and... Find out more in our monthly healthcare newsletter.
With M&A picking up, are we at a turning point for biotech? Check out our latest Kieger AG Chart of the Month Video.