5 facts why one should invest in Healthcare sector? What are the best healthcare mutual funds to invest in?

We all know the healthcare sector is an evergreen industry that has attracted number of people to invest their money for years. We also witnessed a trend where world’s leading business tycoons increased their association with healthcare sector.(see my previous article – Coming Soon – A gene editing startup backed by Bill Gates) Moreover, in the developing countries like Brazil and India, the healthcare sector is changing gears to move on from curative to preventive. With rising awareness levels both in the urban and rural areas and increasing disposable incomes, the future time is believed to witness a mammoth rise in such techniques. So in my today’s article I tried to share some facts why one should invest in Healthcare sector.

The healthcare sector alone offers a vast opportunities to bring in innovative remedies with the help of technological solutions. Healthcare industries are moving towards better patient engagement models. Expert says, there has been a growth of 25 percent in the preventive health care market over the past five years.

However, to obtain a quality healthcare services still remains basic requirement for developing countries where majority of population suffer inefficient access, low expenditure, and less health insurance availability so the accessibility of qualitative services at affordable rate is the primary challenge. But this doesn’t mean at all there are no opportunities to provide a better services and products like healthcare insurance, medical stocks to invest in as well as medical companies to invest in. There is also a need for innovative healthcare delivery mechanisms including specialty chains, e-medicine, tele-medicines and public private partnerships(PPP).

Considering current implementation and having eyes on vast market opportunities healthcare industry can not remain unexplored at all. Entrepreneurs have responded equally well to this situation, finding better solutions to old problems and launching new businesses to meet the needs of an aging but increasingly health-conscious population

Let’s discuss few point which will indicate opportunities for entrepreneur how to invest in healthcare industry and also try to find out how and where healthcare technology companies tend to focus.

 1. Medical Technology

Fragmented segments like diagnostics facilities, have good growth opportunities. Today, the developing countries like India, Brazil are witnessing accelerating growth in imaging technology (like X-rays, MRI and City-scan) awareness, high patient ratio and continuously increasing healthcare expenditure in terms of infra facilities. Since past years these countries have experienced a drastic technological spin from analogue to digital and affordable cost of imaging solutions.

In today’s era, a technological revolution is giving a new edge to patient treatment, saves cost and contributes to sustainable healthcare areas. Medical records of clinics and hospitals, patient admission and registration, clinic lab data management etc. is getting simpler and saves time of caregivers. The shift to mobile devices, wireless technology and cloud computing also reduces system costs, data lost risks and improves workflow.

2. Electronic Health Records

Healthcare is an information-rich enterprise. A greater and more seamless flow of information within a digital health care infrastructure, created by electronic health records (EHRs), encompasses and leverages digital progress and can transform the way care is delivered and compensated. With EHRs, information is available whenever and wherever required.  It enhances privacy and security of patient medical data. It reduces costs through decreased paperwork, improves safety, and reduces concurrency.

3. Telemedicine

Telemedicine has offered an accurate and effective solution to people by providing access to a wide range of medical services. In countries like India it has a huge market of more than $500m and has been implemented in places far and wide under the Public Private partnership.  New communications technologies promise to safely and securely provide clinical care from a distance for example operations via video conference. For routine check-ups, a remote teleconference is a more effective use of time for both the doctor and the patient.

4. Primary Care or First Aid

Since last decade a concept of ICU on wheel, First aid vans are gaining massive popularity. Such services are easily accessible to people. The highly appreciated and admired ‘108 service’ of Indian state Gujarat is the most successful example. It has made high impact on reducing the road side accident cases and medical emergencies those are reported where primary care needed on priority bases.

5. Medical Tourism

Medical tourism is also gaining popularity these days, the sector can attract foreigners and entrepreneurs who are looking for cost-effective treatment countries like India and Brazil. The medical tourism industry in India is growing rapidly more than 27 percent in the last 3 years. The overall market is estimated at $300 million and is projected to reach $ 3 billion by next 5 years, at a growth rate of over 30 percent.

All these fact describes all potential areas where entrepreneurs tends to invest in order to boost their investment and generate mammoth revenues. But at the same time there are also  chances of various risk factors covering both entrepreneurs and patients.

To overcome these risks today there are many insurance players exists in the market worldwide and they presents some attractive schemes which cover medical risks for patients. Entrepreneurs also invest their money in such insurance companies and healthcare stocks and medical stocks which I will cover later in this post.


Healthcare Investment Banking  & Healthcare Financing

We have some very good corporate giants – banks who are involved in healthcare financing as well as healthcare investment banking since past few years. They are Goldman Sachs, J. P. Morgan, Edgemont and many others.  These are top investment banks in the healthcare sector including the the large banks that dominate and the smaller banks that are gaining a greater foothold.

At the same time, the smaller banks, who focus on niche market sectors, are also asserting themselves as key players in healthcare investment banking. One that has for many years been on the top is global investment bank Jefferies. Jefferies faced a setback in 2015 when it lost a top member of its healthcare team in a very public and messy divorce. The proceedings cast all of Jefferies in a negative light amid allegations of widespread drug usage and other unsrupulous behavior in private and with clients. Nevertheless, Jefferies has built a strong past reputations over years of work. If it can bounce back from the scandal, is the wild card in the sector. The jury is still out.

All these firms are extremely popular in healthcare investment banking as well as healthcare financing in the healthcare industry. But they are still out of reach in developing countries like India and Brazil. The investors as well as entrepreneurs of these countries are already looking for opportunities for investment in healthcare sector and healthcare stocks and healthcare mutual funds are best thing for this purpose.

Best healthcare stocks & best healthcare mutual funds to invest in India

In country like India, the trend of healthcare investing is rising exponentially and gaining popularity. Such stocks also tend to offer good returns on well planned investment. Even a common man is also eligible to invest in such medical stock in terms of monthly, quarterly and yearly investment schemes. Bellow, I have tried to enlist such good healthcare mutual funds to invest in with promising returns in India.

  1. SBI Pharma Fund – Direct
  2. SBI Pharma Fund
  3. Reliance Pharma Fund – Direct
  4. Reliance Pharma Fund
  5. UTI Pharma & Health – Direct (G)
  6. UTI Pharma & Health (G)

Top performing U.S. Healthcare Mutual Funds

Healthcare stocks have been beating the market indices the United States for more than 15 years and this dominance looks to continue for upcoming years as well. If you want to tap into the health sector, look no further than mutual funds. Here I’ve tried to enlist sop top performing Healthcare Mutual Funds to invest in U.S. market.

  1. T. Rowe Price Health Sciences Fund (PRHSX)
  2. Fidelity® Select Biotechnology Portfolio (FBIOX)
  3. Vanguard Health Care Fund (VGHCX)
  4. Janus Global Life Sciences Fund (JFNAX)
  5. Fidelity Advisor Health Care Fund – Class A
  6. Invesco Global Health Care Fund
  7. BlackRock Health Sciences Opportunities Fund

With the U.S. health care industry moving from a primarily privatized system to nearly universal coverage, some health care companies may be affected by new laws. It is no surprise that some politicians have spoken for change in the health care sector. Presidential candidate Hillary Clinton has spoken negatively about price gouging in the drug market, which sparked sell-offs in multiple health care exchange-traded funds (ETFs) and mutual funds. However, many of these funds rebounded and are outperforming the S&P 500 Index, a major U.S. benchmark index, for the year as of Dec. 4, 2015.

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One comment

  1. Your article is nice but still I request you to focus on european region healthcare sector as well. Please guide what are the opportunities for small scale investment

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