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The markets remain in a volatile state with events being dominated by financials and the energy sector. Amid this turbulence though, the healthcare sector is proving something of a safe haven, with large cap pharma being the weakest and least predictable in the group. Biotechnology and the medtech have been clear outperformers, not in the least because M&A has picked up in these sectors.

Investing in these sub-sectors is highly technical and creates some challenges for generalists, but there are some basic guidelines which should help investors to select long-term performers. Identify themes with natural growth, for example diabetes, cancer or heart disease. Underlying patient growth is between 5-7 per cent in all these disease areas due to ageing, so the combination of the better treatment option and patient growth should deliver 10 per cent revenue growth for a prolonged period.

Infection is always an attractive investment topic, whether we expect bird flu or not, governments will have to prepare and invest in precautionary measures. Diagnostics have to adapt rapidly to recognise new resistant strains in time to isolate patients or wards. A basket of ideas is the best investment here, since many delays and failures come through, but a diversified portfolio normally pays off.

The theme of innovation, driving replacement: diagnostics, life sciences reagents and tools as well as drug-eluting stents - a scaffold placed into narrowed, diseased coronary arteries that slowly releases a drug to block cell proliferation - fall into this category. Anyone wishing to invest in this area must research and understand which firms have the edge in terms of development and offer a competitive advantage.

Outsourcing remains a big play in the healthcare sector. Clinical Research Organisations have reported 20 per cent top-line growth for the last three years making them an appealing investment target, whilst biotech and pharma firms continue to move business to these specialists since they are better connected in terms of patient pools and global resources.

In addition, there are some areas of expertise where we find an oligopoly with very high-end products, a gold rush. The best examples are the market exclusivity offered by orphan drugs and the blood plasma industry, in which five players will hold 90 per cent of the market. Medical Imaging and cancer radiation therapy are so specialised that margins remain high due to limited competition. The companies in this space have shown a steady growth profile over a long period of time (more than five years) and make a great core investment.

One other factor for investors to bear in mind in the healthcare sector is timing. Biotechnology has had a major run in the US with some large acquisition announcements, so now may be a better time to look at some of the European biotech or global medical technology names. While healthcare services may look like a bargain at the moment, the impending US elections mean there are plenty of uncertainties in the area, and it will be the end of the year before we can expect improved visibility.

Anne Ezendam is healthcare portfolio manager for Credit Suisse's Asset Management business