Health care investing: Is a higher dose of health care good for the portfolio?

Tresl, Jiri ; Payne, Brian C. ; Karels, Gordon V.

Document Type: Article
Year of publication: 2014
The title of a journal, publication series: The Journal of Investing : JOI
Volume: 23
Issue number: 1
Page range: 53-66
Place of publication: New York, NY
Publishing house: Pageant Media ; Institutional Investor
ISSN: 1068-0896 , 2168-8613
Publication language: English
Institution: Business School > ABWL, Finanzwirtschaft u. Finanzmarktinstitutionen (Spalt 2019-)
Subject: 650 Management
Abstract: The health care industry has grown five-fold as a percentage of total U.S. market capitalization since 1930 and has been a relevant economic force in the U.S. equity markets since the mid-1980s. This study analyzes the health care industry as an investment opportunity and finds that overweighting the U.S. equity portion of a portfolio toward health care generates greater returns, enhanced diversification, and positive alphas. In terms of risk and return, the industry also expands the attainable set of investment portfolios beyond those formed using other major industries’ equities. Over the past 25 years, health care industry returns have generated an annual alpha of 180 (360) basis points over the CAPM (four-factor model). These appealing aspects of the health care sector suggest that a slightly increased dosage of health care in a portfolio “did no harm.”

Dieser Datensatz wurde nicht während einer Tätigkeit an der Universität Mannheim veröffentlicht, dies ist eine Externe Publikation.

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