Healthy Rotation

13 AUGUST 2026

Healthy Rotation

Healthcare stocks have performed well of late, buoyed by solid earnings, encouraging regulatory news and major research breakthroughs.

An extraordinary sequence of clinical milestones prompted many from the scientific community to label May a “miracle month” for medical innovation.

The multi-year underperformance of healthcare stocks has depressed the sector’s weight in major equity indices.

And as the chart below shows, healthcare valuations relative to the general stock market have fallen to multi-year lows.

But with general corporate earnings now facing tough year-on-year comparisons, the strong revenue momentum of healthcare stocks should stand out.

Which suggests this nascent sector rotation into healthcare may have further to run.

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Healthy Rotation