Typically during a recession, consumers reduce their spending. But people can’t stop getting sick, becoming injured, or requiring health care products and services, just because there is a downshift in the economy.
So what happens to the healthcare sector when there is a recession?
During the Global Financial Crisis between 2007-2009, the ASX 200 recorded an approximate loss of 37%, whilst the Australian healthcare index recorded a loss of only 15%. Performance in US equivalents were almost identical.
Since global markets returned to economic levels seen prior to the GFC, the approximate five-year return for the health care sector (ASX: XHJ) has been an impressive 122% when compared to 19% for the ASX 200 (Nov 2014 – Oct 2019).
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