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INVESTMENT STRATEGY
January 15, 2024
mins

After missing 2023’s rally, healthcare equities are “on sale”

January 15, 2024
mins
DAVID BAILIN CHIEF INVESTMENT OFFICER
STEVEN WIETING CHIEF INVESTMENT STRATEGIST & CHIEF ECONOMIST
JOE FIORICA HEAD OF GLOBAL EQUITY INVESTMENT STRATEGY
CECILIA CHEN GLOBAL EQUITY INVESTMENT STRATEGIST
MALCOLM SPITTLER GLOBAL STRATEGY AND SENIOR US ECONOMIST

SUMMARY

US healthcare equities were left out of last year’s stock market rally amid a rare earnings recession for the sector. Given accelerating innovation and rising demand from aging populations, we see potential opportunities on offer.

Just two weeks into 2024, the healthcare sector has shrugged off the title of being a notable laggard in 2023. In contrast to the previous year's sluggish 0.3% return (vs 24.2% S&P 500), healthcare now leads the performance chart among all the other sectors year-to-date, boasting a 3.0% return (vs -0.3% S&P 500).

As we noted in our Wealth Outlook 2024, tighter financial conditions, regulatory uncertainties, the glut of inventories post-COVID and investor fear that GLP weight-loss and diabetes drugs will negatively alter demand for other health care modalities have been the culprits behind a rare healthcare earnings recession.

Our view is that the new generation of GLP-1 drugs are not substitutes for other treatments and procedures but are likely to function as a complement that will help drive better health outcomes and market performance for selected shares.

OUTLOOK

Wealth Outlook 2024: Mid-Year Edition

Our guide to the global economy and markets for the rest of 2024 and beyond.

 

We expect the current phase of growth and normalization to continue at least into 2025. For ultra-high-net-worth individuals and their family offices, we make the case for fully invested, globally diversified portfolios.

Discover our outlook for asset classes and our favored markets, including those that may benefit from the powerful long-term forces transforming the economy such as artificial intelligence. 

Read report

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