Profit from a healthier world
Nov 13, 2009
Print this article
Several major trends can be identified in the development of global healthcare which may offer pointers for investors.
With a worldwide tendency for greater growth in the private-sector element of dual public-private healthcare systems. Patients are being encouraged - or forced - to pay for a greater proportion of the medical services they need. Independent professionals and privately-owned hospitals/clinics are increasingly used to ease the burden on public services. Medical tourism is a fast-growing source of elective surgery.
If you are interested in investing in healthcare, there are many options. Here are a few suggestions for you to research further:
Funds such as Atlantis China Healthcare (based in Ireland), Adamant Global Generika (Switzerland), Sigma Life Sciences (Norway), APO Medical Opportunities (Luxembourg) and Biophère Europe (France).
Exchange traded funds such as iShares Biotech and iShares DJ Healthcare in the US.
Pharmaceutical companies such as GlaxoSmithKline, Novartis, Roche Holding, AstraZeneka, Pfizer, Bayer, Sanofi-Aventis, Daiichi Sankyo, India-based generics supplier Dr Reddy’s Laboratories, China-focused Mindray Medical International.
Medical products and services suppliers such as Johnson & Johnson, Bioquell, Thermo Fisher, Covidien, Varian Medical Systems.
Property stocks based on the medical sector such as Health Care REIT in the US.
Medical tourism pioneers such as Bumrungrad in Thailand and Parkway Holdings in Singapore.
Special FREE report
from MoneyWeek magazine: When will house prices bottom out - and how will you know?
- Why UK property prices are going to fall 50%
- When it will be time to get back in and buy up half price property
However, political factors are becoming increasingly important for investors in healthcare as a risk to profits.
While soaring costs force governments to have greater recourse to private-sector services and financing, voters and the vested interests also force them to intervene increasingly to limit their fees and direct more of their energies into providing unprofitable public-service benefits.
The resources available to pharmaceutical companies for the hugely expensive business of developing new drugs are being squeezed by the spread of generic alternatives and pressure from governments to cut their prices.
On the other hand, politics can sometimes work to investors’ advantage where products and services – high-specification hospital cleaning may be an example – offer opportunities in areas favoured by policymakers.
As a theme for investing in, healthcare certainly seems to be something that ought to be in any balanced portfolio focused on low-risk growth and income.
• This article was written by Martin Spring in On Target, a private newsletter on investment and global strategy. Email
Afrodyn@aol.com
to be included on the recipient list.
Related articles
-
By Luca Serino, May 25, 2012
-
By Paul Hill, May 25, 2012
-
By Paul Hill, May 25, 2012
-
By Phil Oakley, May 25, 2012
FREE - MoneyWeek's daily investment email
Our free daily email, Money Morning, is an informative and enjoyable analysis of what's going on in the markets. Written by our Editor, John Stepek, and guest contributors.
Sign up FREE to Money Morning here.