Fasten seatbelt for pre-election rollercoaster
In September 2020 the MSCI World Healthcare Net Return (NR) Index returned -1.4%. The MSCI World NR Index decreased by -3.5%. Healthcare extended its outperformance over global equities to 4.6% year-to-date. Over the month, global equities traded choppy. Besides COVID-19 newsflow, the approaching US elections brought some additional volatility to markets. The Healthcare sector, being one of the most politically sensitive sectors, with lot of debates around drug pricing and the Affordable Care Act (ACA), is not new to such trading behaviour before of US elections (see “In the spotlight” on next page).
The MSCI World Healthcare NR Index gained 3.0% in June, while the MSCI World NR Index rose 1.5%. The decline in 10-year yields provided a booster shot to growth stocks, relative to their value peers. It is likely that the next months will continue to be dominated by debates on Fed and interest rates topics, and related growth/value factor pivots. More clarity on tapering can be expected after the summer break and the Jackson Hole summit.
Kieger AG is a main sponsor of the ”Swiss Sustainable Investment Market Study 2021”. This sponsored page by our Kieger Healthcare Portfolio Managers Urban Fritsche and Dr. Maria Specogna discusses: “Covid-19: a trigger for impact investors in global healthcare”.
In May, Healthcare gained 2.1%, while Global Equities rose 1.6%. The shift into value at the expense of growth and momentum continued over the past weeks, with Energy, Financials and Materials posting the top performances. IT returns, given the sector’s growth characteristics, were again subdued.