4 Healthcare Funds To Bet On For Stunning Returns In 2021

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Healthcare funds are defensive and deliver better performance during long bull periods. Last year, these funds acted as a buffer for investors and fetched stunning returns. Healthcare encompasses medical supply and medical equipment companies, biotechs, pharmaceutical firms and providers. Hence, consumers continue to buy these goods and services irrespective of the state of the economy.

Apart from the defensive nature, the health scare in 2020 boosted demand for medical suppliers and medical equipment providers, making them outperformers of the group. This year however, as vaccination remains the prime goal of governments worldwide, the healthcare space will continue to tread north. The pandemic pushed several pharmaceutical companies to find a safe and effective vaccine, and therapeutics for the infected ones. Giants like Pfizer and Moderna have been in the investors’ radar as they urgently looked to find a cure and eventually received emergency use authorization from the FDA.

Keeping the pandemic aside, the healthcare space is benefitting from technology evolution, starting from telehealth to robotics. Advancement in telehealth has been quite eminent last year.  Per NTT Data Services’ report, demand for virtual care went up to 40-50% due to the pandemic from around 10% before the pandemic.

Additionally in 2021, the healthcare sector will be witnessing several tie-ups, partnerships, mergers, consolidations and IPOs. Health systems (especially hospitals) are expected to make alliances, including collaborations with non-traditional partners (like technology providers), to address gaps in infrastructure exposed by the virus. Digital transformation will remain a prime focus as the pandemic bumped up demand for virtual and behavioral health services. Demand for telehealth remains above the pre-pandemic levels as consumers weigh convenience of such services, pushing health systems to find a new balance between virtual and in-person visits.

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