Here’s why I think investors should gain exposure to favourable healthcare trends through investments in ResMed Inc. (ASX:RMD) and…
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Despite the pandemic, over the last 12 months the healthcare sector has been a great place to invest your money.
Since this time last year, the S&P/ASX 200 Health Care index has generated a return of 17%. As a comparison, the benchmark S&P/ASX 200 Index (ASX: XJO) is down 7.2% over the same period.
Due to the growing demand for healthcare services because of ageing populations, improving treatment options, and chronic disease burden, I expect this outperformance to continue over the 2020s.
In light of this, I believe having exposure to the healthcare sector would be a great thing for a portfolio.
But which shares should you buy? Here are two options to consider:
iShares Global Healthcare ETF (ASX: IXJ)
I think the iShares Global Healthcare exchange traded fund (ETF) would be a fantastic option for investors looking for healthcare exposure. Through a single investment, it provides investors with access to a wide range of companies across sectors including biotechnology, pharmaceutical, and medical devices.
Among its holdings you’ll find our very own CSL Limited (ASX: CSL) and Ramsay Health Care Limited (ASX: RHC). And among its many international holdings are the likes of Johnson & Johnson, Pfizer, Novartis, Merck & Co, and United Health. I believe these companies are well-placed for growth over the next decade and feel confident the ETF can generate strong long term returns for investors.
ResMed Inc. (ASX: RMD)
Another ASX healthcare share I think could provide strong returns for investors over the 2020s is ResMed. It is a medical device company with a focus on sleep treatment products and ventilators. It has been growing at a consistently strong rate over the last decade and looks well-placed to continue this positive form.
This is due to its world-class, cloud-connected hardware and software solutions and its huge addressable market. Management currently estimates that there are 936 million people with sleep apnoea globally. With the majority of these sufferers undiagnosed, I believe this gives it a significant runway for growth. In addition to this, the company notes that there are 380 million people who suffer from chronic obstructive pulmonary disease (COPD) and over 340 million people living with asthma. These are all people whose lives could be improved with ResMed’s products in the future.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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