TSX ETF Investor Centre
Healthcare - A Healthy Dose of Defense
The current equity bear market regime and recessionary concerns due to the fast pace of Fed rate hikes have prompted investors to seek defensive income-oriented strategies. We believe the healthcare sector provides both stable dividend and defensive characteristics. Demand for healthcare services continues to increase, with a growing and aging population enjoying longer lifespans. In addition, continued innovation in the sector drives the introduction of new treatments for more complex diseases and expanding market opportunities for Healthcare companies. Many large cap healthcare stocks generate durable cash flow, due to their diverse product offerings, and can maintain pricing power and pass-through costs in inflationary environments. These are attractive defensive investment characteristics. Since the 1960s, Healthcare has outperformed the broader market by approximately 3 percentage points annualized when inflation was elevated as shown in the figure below. In the past decade, Healthcare has also been one of the only parts of the market to consistently outperform when growth was slowing and real interest rates were rising.
Investing in Healthcare - A Thematic Approach
Global demand for healthcare continues to rise given demographics (aging global population and increasingly longer life spans) and economic growth. Innovation in the sector plays a key role in improving the health of the world’s population.
Healthcare: Vaccine as a Service
The newest COVID-19 variant, Omicron, has placed a spotlight on the healthcare sector - particularly vaccine manufacturers and life science companies.
Le variant le plus récent de la COVID-19, Omicron, a mis en relief le secteur des soins de la santé, particulièrement les fabricants de vaccins et les sociétés des sciences de la vie.