It should come as no surprise that healthcare is one of the largest investment sectors across the globe, due to the sustained level of demand that it receives and the range of lucrative assets involved.
Of course, some international markets are larger than others, with nearly half of the world’s total healthcare spend ($7.8 trillion) committed in the US ($3.5 trillion). Overall, however, the global healthcare market is growing at a faster rate than the global economy, making it a significant investment opportunity globally.
But what’s the market like in the UK, and what do you need to know about investing in this marketplace in 2020?
Healthcare in the UK – Why is it a Viable Market?
In some respects, the UK healthcare market may not be as attractive as other alternatives, thanks largely to its non-privatised nature and the fact that national government and reduced investment into the NHS over course of the last decade.
However, there are numerous facets to the healthcare market, including particularly lucrative examples such as pharmaceuticals and market leading tech stocks.
Not only this, but the UK has a rapidly aging population, at least if the large-scale ONS data reported in 2018 is to be believed. This revealed that there were nearly 12 million people aged 65 and above in the UK at this time, of which 5.4 million were actually older than 75.
This creates far higher demand for healthcare and their associated stocks, and this trend is likely to continue indefinitely as medical and scientific advancement continues at pace.
It’s also hard to ignore the range of viable stocks in the UK healthcare sector, from large-cap, FTSE 100 companies to up-and-coming small-cap equities that are poised to grow at an exponential rate over time.
Identifying Key Stocks and Targeting Healthcare Assets in 2020
Arguably, there has never been a better time to invest in the healthcare sector in the UK, with the factors referenced above creating a perfect storm through which traders can potentially optimise their returns.
Amongst the most prominent large-cap healthcare stocks are AstraZeneca, with this science-led biopharmaceutical company specialising in fields such as cancer and metabolic diseases. You may also have heard of GlaxoSmithKline, which is something of a blue-chip pharma stock that recently branched out into the consumer health business.
During recent times (and particularly the Covid-19 pandemic), we’ve also seen smaller-cap medical technology firms start to outperform their more established rivals.
This trend is particularly prominent in the UK and US markets, where 28 medical tech companies out of the three industry groups tallying 223 stocks boasted Composite Ratings of 95 or better.
This matches the typical score of the best quality stocks in the world, and there’s no doubt that healthcare equities of this type offer tremendous value to investors.
If you want to target a variety of alternative stocks as a way of creating a diverse and lucrative portfolio, you could consider investing in the type of fund managed by Downing’s Rosemary Banyard.
This disciplined and strategically led funds tend to feature a concentrated portfolio of 25-40 holdings, combing small, medium and large-cap stocks as appropriate. These firms will also be listed on the UK stock exchange, making it easier to measure your success and over time.