Healthcare currently accounts for 12% of the global economy, and the sector is growing roughly 5-6% each year, which makes it one of the fastest growing sectors. According to independent market analysts, there are no signs of it slowing down, making the sector highly attractive to long-term investors.
For several decades, the healthcare sector has accounted for a rising share of the world’s GDP. In the US, the share has risen to 18% of GDP. In the OECD countries, the average is 12%. In the emerging markets, such as China and India, with 5 and 4% respectively, shares of GDP are rising quickly, which means there is great potential.
Historically, shares in healthcare have also shown higher growth than the stock market in general. During the period January 1995 – October 2018, return, measured in USD, of the MSCI World Healthcare Index grew by 685% compared to 211% for the MSCI World Index (a broad global equity index).
The four sub-sectors (pharmaceuticals, biotechnology, medical technology and service) are always represented in the fund. These develop independently of each other, which increases our ability to diversify our portfolio.
RISING LIVING STANDARDS
Several strong megatrends point towards continued strong growth for the healthcare sector. This is partly due to a general improvement in living standards in the world and partly due to an ageing population, both of which bring more lifestyle diseases such as obesity and diabetes, particularly in the developing markets.
In several emerging countries, not least China and India, we are now seeing increased investments in healthcare through, among other things, state health insurance and improved access to healthcare.
A COMPLEX SECTOR
The healthcare sector is a complex segment that places high demands on investors to succeed over time. In many ways it is a controlled market, with a plethora of rules and requirements that must be followed. However, it is a dynamic and volatile sector with excellent investment opportunities. It is also a growth sector with many undervalued companies. The potential is thus high for savvy investors.
The healthcare sector is characterized by a high level of innovation and accelerating development of new products and better treatment methods.
Our long experience in the healthcare sector gives us strength and so does our unique approach, in which the medical experts in our Scientific Advisory Board provide invaluable support to our managers. These experts, with their extensive knowledge and global networks, provide the basis upon which our portfolio managers evaluate companies in their daily work.
Please note that we do not give investment recommendations, and investors that consider investing in the fund are recommended to discuss the matter with professional investment advisors.