Why healthcare stocks can be a portfolio anchor: Harvest CIO

December 6, 2018

Published by Harvest ETF’s

Harvest Portfolios’ Group Chief Investment Officer Paul MacDonald was a guest on BNN’s Market Call program this week.

The discussion with host Anita Sharma focused on the healthcare sector, including trends and the outlook for 2019. Paul also fielded questions from viewers.

Paul discussed the philosophy behind the Harvest Healthcare Leaders Income ETF  (TSX: HHL, HHL.U) which aims to capture growth in this sector. The ETF invests in the stocks of 20 global healthcare leaders with a minimum market capitalization of US$5 billion at the time of investment. They must also have options listed on a recognized options exchange.

As of Nov 30, 2018, the Harvest Healthcare Leaders Income ETF had an average market capitalization of US $131 billion. The average dividend yield was 1.86% with a 5-year return on equity of 28.87%.

Paul likened investment in healthcare stocks to financial services in the 90s. He sees the sector  as a core portfolio holding because of its “massive structurally positive dynamics.” The trends include aging populations in developed countries with increasing demand for drugs and surgical procedures. This, in turn, is driving technological advances. Emerging markets are maturing which means higher demand for basic services including pharmaceuticals and medical devices. The investable segments within the sector include health insurers, medical device manufacturers, drug companies and biotechnology firms.

He noted that in a volatile year, healthcare stocks have produced double-digit gains and he expects to see strong growth in 2019.  

To listen to the full 45 minutes BNN segment, click here.

For more on Harvest Portfolio’s Group ETFs click here.


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