Health care sector ripe for disruption
Long-term demographic trends and growing consumer awareness mean the health care sector is ready for radical transformation.
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27 Sep 2021Markets traded around three themes in August: inflation, timing of central bank stimulus reduction and more moderate growth3 min
21 Sep 20213 min
Why do we like health care as an investment theme in portfolios?
There’s a very basic driver for health care based on demographics – people are living longer. World Health Organisation research shows that the average global life expectancy has risen from 66 in 2000 to 72 in 2019. As people get older, their need for health care increases and so a steady rise in demand is built in.
The health care sector also has defensive characteristics – it tends to endure market volatility better than other sectors. This makes it particularly attractive when the economy slows. As we currently see signs of global growth easing off, after several years of strong positive growth, health care is one of the sectors that we’ll be sticking with to help preserve the value of client portfolios.
Finally, health care is ripe for disruption after a long period of steady structures and approaches. Disruption yields opportunities and as the sector develops that’s what we expect to see.
Health care has been a key investment theme in Coutts portfolios for some time. Long-term demographic changes are fuelling demand and continual innovation is creating new treatments and a more efficient route from the drawing board to the consumer.
But the market is changing too. People are more demanding and informed, and there’s a growing appetite for self-monitoring equipment that’s driving key sectors of the market. Finally, regulators are running to catch up with the developers, making it quicker and easier to get iterative digital health products to market.
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