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.
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
