Best Sector Of 2018 And Its Hit ETFs & Stocks
Zacks Investment Research | Jan 01, 2019 11:10PM ET
Healthcare was the best-performing sector of 2018, having gained nearly 4.7%. The dual tailwinds of encouraging industry fundamentals and the sector’s defensive tilt led to the rally in the sector. The wave of mergers and acquisitions also added to its strength.
Solid Trends
The sector is clearly benefiting from promising drug launches, faster drug approvals, accelerated pace of innovation, growing importance of biosimilars, cost-cutting efforts, aging population, ever-increasing healthcare spending, expansion into emerging markets, growing middle class, solid demand for new drugs and Trump’s tax reform. In particular, the new tax legislation has enticed companies to bring offshore cash back home at reduced tax rates, and the repatriated money is being used for share buybacks, dividends, acquisitions and capital spending.
Defensive Nature
The sector’s non-cyclical nature is an added advantage amid the turmoil in the stock market due to global growth concerns and trade spat between United States and China. Additionally, the emerging market turmoil as well as slowing growth in Japan and Europe led investors’ flight to defensive and stable sectors (read: Zacks Investment Research
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