When investors consider diversifying their portfolio by investing in companies with consistent growth, they often default to tech companies such as Amazon, Google, Apple, and Meta, among others. However, few investors think of healthcare as an industry with similar potential for growth.
The healthcare industry presents an excellent opportunity to invest in companies that are consistently innovating and growing to better the well-being of people and raise productivity.
Over the years, the healthcare industry has remained a reliable area for investors looking for a defensive strategy. And because of the constant demand for healthcare services, healthcare equities tend to stay stable across the different phases of a business’s cycle. These instruments can also perform better than other sectors in a growth cycle’s late stages and contraction periods.
If you are, therefore, looking to diversify your portfolio by investing in the healthcare industry, investing in health ETFs (exchange-traded funds) is an excellent way to start. By investing in ETFs, you negate all the hard work you’d have done, like analyzing individual companies before injecting your cash into their equities.
The most important thing to remember is to find a group of equities you want to own, understand its risks, and have a fund manager do the hard work for you. You can buy a broad cross-section of the industry through a healthcare ETF or chop it into more acceptable segments. This way, you can diversify more and reduce your risks compared to buying individual funds.
Investing in healthcare funds also presents you with many options, especially since the sector is significantly broad. It can be broken down into sub-sectors depending on the exact type of business it deals with. As such, you have multiple ways your money will work for you since your investment will give you exposure through:
- Broad Healthcare – This group of instruments encompasses the various healthcare sub-sectors listed below, giving you broad exposure to healthcare as a whole.
- Biotechnology – It includes all the companies specializing in biotechnology and similar drugs.
- Medical devices – Deals with the subsectors providing medical devices, such as implants or other medical equipment.
- Healthcare providers – This subsector includes companies that deliver care to individuals.
- Pharmaceuticals – This group includes companies that develop traditional drugs instead of biotech companies.
The majority of these subsectors have their unique dynamics. Their performance is driven by a variety of factors, both positive and negative. You can invest in the whole sector, its constituent industries, or both.
That said, why should you invest in healthcare funds?
Why should You Invest in Healthcare Funds?
The healthcare sector provides enormous opportunities, and its growth is always on a rising trajectory. Long-term demographic trends and fundamentals support these opportunities.
In fact, the global healthcare sector is projected to remain robust in both scale and outlook. Globally, healthcare spending will reach USD 10.059 trillion by the end of 2022.
Historically, the healthcare sector has been the strongest performer in the late cycle and recessionary periods. This suggests that the industry is an area investors should look into amid uncertainty over the broader macroeconomic outlook.
In the meantime, the sector is strongly supported by growth from demographic trends and innovation. There is a growing demand for healthcare brought about by the aging populations in both developed and emerging markets, as well as increasing wealth and a rising middle class.
A wide array of research and development firms constantly delivering new products to fulfil unmet demands will continue supporting the sector. This further strengthens healthcare funds making them quite attractive to investors.
So, How do You Get Started with a Healthcare Fund
When you are a long-term investor looking to build a portfolio, it’s a good practice to compile a few investments that consistently support a foundational base. ndovu Healthcare Fund is an ETF that provides positive returns with amazing rates.
ndovu’s healthcare fund provides you with exposure to global blue-chip healthcare companies with a brilliant strategy that is actively managed to ensure that you enjoy increased yields while the risks are mitigated.
Managed by an established team of industry experts and a proven track record of success, ndovu’s healthcare ETFs create investment products that makes a difference.
Sign up here to get started.