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.
Rarely are health inequalities more apparent than when walking around San Francisco during the J.P. Morgan Healthcare Conference. In our chart of the month, Raphael Oesch (Portfolio Manager), takes a look at the statistics and discusses some of the reasons behind the figures.
We recently attended the 41st J.P. Morgan Healthcare Conference in San Francisco, which took place from January 9th to January 12th 2023. Our overall conclusion from the conference is that the industry remains in good shape. The key themes that emerged during the week from a devices and services perspective were, the rise of value-based care and innovation & digitalisation. However, it also became clear that the macroeconomic environment is still the dominant force behind (sub) sector performance.
Day after day currently feels like a roller coaster ride, going up because of better than hoped for CPI numbers, down because of looming recession fears, and back up because of a less hawkish FED speech. Are we there yet? What do you think?