Data-driven insights and analysis from our investment team every week.
With the first of the US presidential debates taking place this week, we should find the investment agenda increasingly dominated by the potential impact of this important event, which takes place in November.
In recent elections, US healthcare has been one of the sectors most impacted and we expect that as we move closer to election day, the rhetoric around drug pricing reform and expansion of coverage should increase. This has typically led to underperformance for the drug manufacturers and the large insurance providers in an election year, and more especially in the months leading into election day.
Our chart this week demonstrates how one sub-sector of the US healthcare sector – the US medical devices segment – has performed in the last election year and the current one, given its general immunity from drug pricing reform. In 2020, from a slow start, it picked up from July to strongly outperform the broader US healthcare sector. Similarly, we think US medical devices should pick up from a slow start this year to eventually outperform the broader US healthcare sector as we move closer to the US presidential election. This was one of the reasons why we increased our concentration into this sector earlier this year.