In Healthcare, Drugmakers and Managed-Care Firms Look Attractive

Morningstar's US Healthcare Index has increased 16% over the trailing 12 months, as concerns about the coronavirus and potential major U.S. healthcare policy continue to ease. However, the returns have slightly lagged the 19% gain in the broader equity market. While the largely solid underlying fundamentals of the healthcare sector are likely helping to support the returns, we believe some concerns remain around changes to U.S. healthcare policy, albeit at a lower level than before the November elections. Overall, we don’t expect any major changes regarding healthcare reform, but rather more moderate changes that target insuring more people and easing some of the patient costs around specialty drugs.

Healthcare sector index versus market index - Morningstar