Healthcare: Funding pressures take toll on pharma

This article is part of
Investing in equity: Specialist sectors

For investors who are seeking broad healthcare exposure, medical equipment is strongly tied to long-term demographic shifts with more predictable development and earnings potential. 

For pure pharma exposure, investors should adopt a diversified strategy to reduce the stock-specific risk of drug disappointment and achieve some limited exposure to a growth industry full of potential, but increasingly fraught with risk.

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Andrew Moffat is an investment manager at Hargreave Hale

Key figures

12.3% - Share of healthcare stocks in the MSCI World index

$3.2trn - Market capitalisation of healthcare stocks in the S&P 500

95ppt - MSCI World/Biotechnology index's outperformance over its parent index over five years

13ppt - Underperformance of the MSCI World/Pharmaceutical index