XHS - VHT: Beware Of False Growth Narratives Like Aging Population
(Source - Pexels/Pixbay)
It is widely believed that the Healthcare sector is a safe sector in a recessionary environment because "people always need medical treatment." While that is historically true, it seems that many investors are underweighting the substantial risks in the sector.
Healthcare stocks saw tremendous performance during the creation and deployment of Obamacare from 2011 to 2015. During this timeframe, the Vanguard Health Care ETF (VHT) outperformed the S&P 500 by roughly 50%. As is almost always the case, periods of extreme outperformance are met with periods of comparable underperformance.