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Created on 22.11.2018

More than just pharmaceuticals: invest in healthcare

Did you know that you too can invest in healthcare? Just like real estate or precious metals, healthcare is home to a wealth of opportunities. Because of their relative stability and the significant growth you can expect, healthcare investments offer numerous benefits. It’s also a good way of diversifying your portfolio. There are so many investment opportunities out there.

Megatrends dominate the healthcare sector almost like no other: demographic change and an ageing population, the rise in chronic diseases such as diabetes or heart disease and the digital transformation within healthcare (e-health) are just some of the major themes in the healthcare sector. Innovation is an absolute must for companies in healthcare. This, in turn, creates exciting investment opportunities for small- and large-scale investors alike. And the world of healthcare is vast and diverse. Most investors are primarily familiar with pharmaceuticals (developing drugs) and biotechnology (research into enzymes, cells, organisms and their applications). This is probably partly because both these areas attract a lot of media attention. And yet, there are so many other investment opportunities in healthcare. Here are just a few examples: hospital management companies, medical technologies, companies manufacturing medical parts such as artificial limbs, joints or contact lenses, and many more.

Why invest in healthcare?

If you take a look at the two main megatrends in healthcare, you can see why this sector is such a good choice for long-term investments:

  • Our population is constantly growing, and not least because of the rising standard of living we are seeing and our ageing population. What this means is major investment opportunities are emerging in the healthcare sector. After all, the more patients there are, the bigger the healthcare sector is in general. This isn’t something that only hospitals and doctor surgeries benefit from, it’s also great for suppliers, including manufacturers of artificial joints and pharmaceuticals companies.

  • The healthcare sector is currently undergoing a digital transformation as it works on developing e-health solutions. E-health is helping to connect all parties involved more effectively. Take, for example, electronic patient records (or EPRs). These are not just used to gather patient data, they are also used to share this data quickly and with ease. The potential for digital solutions in the healthcare sector remains high. This is why lots of new companies and business branches are emerging that specialize in these solutions, which they can then invest in with funds and shares.

    As a general rule, unlike other sectors, the demand for healthcare services is still relatively stable, and was not affected as much by economic fluctuations in the past. If we fall ill, we seek treatment. Stock market prices and economic factors have very little bearing on this, which is why investing in healthcare companies is such an interesting prospect.

How to invest in healthcare

Investors looking to invest in healthcare have a whole host of tools that they can draw on. There are, for instance, a number of healthcare funds they can consider. These cover individual sectors such as medtech, pharmaceuticals or life sciences, or you can diversify with them within the healthcare sector. Of course, investors can invest in healthcare companies directly as well, which would involve purchasing shares from pharmaceuticals and biotech companies.

But before you decide to purchase shares  or invest in a fund, it’s a good idea to gather enough information about a company or a sector. This will help you decide on the right investments that meet your requirements. Your bank advisor can also help you here.

Healthcare is a sector that is often overlooked, and its investment potential is frequently underestimated despite the numerous advantages you can enjoy. Investors can benefit from substantial growth potential, and, depending on the investment, also expect stable growth.

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