Why healthcare is touted as a safe bet for investors

Why healthcare is touted as a safe bet for investors

Global stock markets have faced increasing volatility in the face of monetary policy tightening and negative sentiment following the crisis in Ukraine. Against this backdrop, commodity costs are rising and the price of Brent crude spiked to highs north of $130 per barrel. In response, investors are turning to safe-haven assets such as US Treasuries, the Japanese yen, Swiss franc and gold, all of which have performed well, helping them to limit their exposure to losses. However, while these safe-haven assets may continue to perform well in the near term, they also present a number of drawbacks as a form of protection during the current crisis in Ukraine. For example, with the Swiss franc exposed to the European economy, it could be negatively impacted if energy supplies are interrupted. Longer-duration US treasuries meanwhile do not offer attractive yields, particularly in the face of imminent central bank rate rises. And gold faces headwinds from rising real rates as the Fed tightens and inflation moderates. One smarter way for investors to insulate themselves against current market volatility, in our view, is to build defensive exposure into portfolios. Global healthcare is a particularly attractive sector for two key reasons. First, healthcare costs are