investment viewpoints

Health our only wealth

Health our only wealth
Henk Grootveld - Head of Trends Investing

Henk Grootveld

Head of Trends Investing

Investing is always linked to a view of the future and current uncertainty appears to be at a historic high due to the COVID-19 pandemic. Given the last lockdown in the West occurred in 1666 when central banks were not yet invented, it’s unclear whether massive stimulus from governments and central banks will be sufficient to avoid an economic depression.

Equity markets have bounced back from the March lows and investors have apparently switched their view from the glass being half-empty to the glass being half-full. Despite most companies cutting or removing their earnings guidance, most financial analysts seem to focus on the economic recovery before the depth and timing of the bottom is known. While healthcare scientists differ widely in opinion, most expect a second and third wave of coronavirus infections in the absence of a fully effective vaccine. The Economist has pointed out that expecting a vaccine to be approved within the next 12 months is as technically unlikely as putting a person on Mars in the same timeframe. Without any hiccups, it might be theoretically possible to launch in 12 months. However, it still takes another year to get to Mars or to produce 7.5 billion vaccines.

Lenin once said “There are decades where nothing happens; and there are weeks where decades happen.” The pandemic has clearly illustrated his point as events that typically span decades occurred in the space of weeks. In the face of such uncertainty, we focus our investment strategies on secular trends that appear most likely to persist or, even better, gather speed. History has shown that a crisis, like war, a depression, or in this case apandemic, spurs innovation on a large scale. The Manhattan-project would probably not have been undertaken without World War II. Nor would Project Apollo have put a man on the moon without the context of the Cold War. Even the law of gravity might potentially not have been discovered as early if Isaac Newton were not quarantined to avoid the Black Death. A major crisis acts like a midwife and accelerates trends that are already present in society but still embryonic.

We expect the current pandemic to act in the same way and see several secular trends entering the exponential growth phase due to strong tailwinds from the pandemic. The most important is the renewed sense that health is our only true wealth. Through lock downs, governments and societies have clearly prioritised health over GDP growth. We expect that nascent trends aiming to improve the overall health of society at potentially lower cost will enjoy strong tailwinds in the coming decade. This paper elaborates on four trends that have “better health at lower cost” at their root. We expect these to make a strong impact on the economy in general, and the healthcare sector in particular.

The trends are as follows:

  1. Fast forward into eHealth1

  2. Healthy lifestyle as ultimate prevention

  3. More government and peak margins

  4. Changing consumption patterns.



1 describes the use of digital technologies in healthcare


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We expect that nascent trends aiming to improve the overall health of society at potentially lower cost will enjoy strong tailwinds in the coming decade. This paper elaborates on four trends that have “better health at lower cost” at their root. We expect these to make a strong impact on the economy in general, and the healthcare sector in particular.


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