Healthcare sees 10% gains amid COVID-19 pandemic
Healthcare stocks have outperformed other industry sectors by a ‘wide margin’ year to date, becoming the third-largest sector in the ASX 200, according to S&P Dow Jones.
Healthcare had already grown from a 1% weight in the index in 2000 to 10% at the end of 2019, the third-largest behind financials and materials. It had since grown further over the last three months to almost 15%, almost in line with the materials sector.
Similarly, its market cap had risen from $7 billion in 2000 to $210 billion in April, 2020.
Biotech stock CSL was the largest Australian healthcare stock, representing 70% of the sector by market cap, and replaced Commonwealth Bank in March as the largest Australian company by market value. Shares in CSL, which produces biotherapies and influenza vaccines, had risen 18% since the start of 2020, to 16 April.
Other strong healthcare stocks included Cochlear, Sonic Healthcare and ResMed.
On the other hand, energy and financials were the worst-hit sectors with losses of 38% and 27% respectively since the start of 2020.
Michael Orzano, senior director for global equity indices, said: “While healthcare has come to the forefront during the devastating pandemic, the sector’s recent rise is an extension of a long-term trend that has been unfolding in the Australian equity market for many years.”
AUTHOR
Laura Dew
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