The Australian Healthcare Sector has been a standout performer over recent decades but as we start a new era of rising interest rates the goalposts appear to have changed with the sector treading water for over 2-years albeit in a very choppy fashion. Traditionally healthcare stocks have been regarded as defensive but with interest rates weighing on high-valuation stocks it has been a tougher backdrop post-Covid as stocks in the sector move under their individual steam i.e. perform as a business or struggle.
- Tightening capital markets are also making it a very tough time for the likes of Biotech which require money to evolve, funds are costing more while at the same time being harder to raise.
One of the biggest issues for the sector, like many industries across the country, is labor including both doctors and nurses after a gruelling couple of years through Covid. Each company has a very different outlook as we move forward from Covid but it’s hard to argue that a significant overweight stance is logical from either a performance catch-up or earnings upgrade perspective.
