The Australian Healthcare Sector has surged ~30% since late October, and although we are bullish over the coming years, a period of consolidation is overdue, and an 8-10% pullback wouldn’t surprise – at current levels, we aren’t looking to increase our exposure to the sector, pretty much in line with our view on the market in general. The sector has shown a strong inverse correlation to bond yields over the years, falling sharply when bonds rally/yields fall and vice versa. MM’s macro outlook is yields will fall through 2024/5 but not as fast as many hope, and the futures are pricing, another reason why we can see a pullback following the recent strong advance.
