CIO Strategy BulletinArticle19 Mar 2024

Healthcare: 2023’s Pain is 2024’s Gain

CIO Strategy Bulletin

After a year of headwinds and lagging performance, the healthcare sector looks to be on the cusp of a breakout in 2024.

Key takeaways from this month's bulletin:

  • MedTech Growth on Sale: In the US alone, 10,000 people turn 65 daily. Managing disease and chronic illness has become more expensive, and innovation within the healthcare industry is currently facilitating a shift from treatment to prevention. At our latest Global Investment Committee, we recommended that clients consider adding exposure to innovative healthcare companies, with a particular focus on high quality MedTech along with a selective or actively managed approach to biotech investments.
  • 2023 was Tough for Healthcare Equity Performance, but 2024 Looks Promising: The 2023 downturn has created potential opportunities for the unstoppable trends of longevity and innovation. Healthcare stocks are transitory, in our opinion, thus creating a favorable setup for the sector’s potential outperformance in 2024. It already has had a solid start this year.
  • Don’t Fear an Election Year: Drugmakers are an easy punching bag for politicians on both the left and right, and in previous cycles socialized medicine and drug pricing reform were key topics of debate. However, on average, healthcare has returned 3.5% during election years, slightly outperforming the S&P 500. Among subsectors, medical devices and biotech have outperformed S&P 500 the most, by 5% and 2% respectively.

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