Applied Research

Identifying Risks and Revealing Opportunities Sector by Sector: Health Care

Have the Political Debates Affected the Health Care Sector’s Fortunes and Risks?

In this series of articles, we dig deep into the risk characteristics of—and investment opportunities provided by—a number of macroeconomic sectors. Our aim is to help risk model users better understand risk from a sector perspective. The information should be helpful to risk managers, especially at fundamental shops, as well as portfolio managers (PMs) with a sector focus. Even PMs who don’t build their portfolios sector by sector should find the analysis useful, as it shows how Health Care stocks interact with other parts of the portfolio and how returns in that sector may differ from those in other sectors.

Health Care, for a long time a market “darling” rising more than 700% from 2008 to 2015, has seen its relative strength diminish over the past couple years. That said, the signals of whether the current debate is increasing Health Care’s volatility are decidedly mixed.

Author: Melissa R. Brown, CFA


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