Health Care Investing:<i>Is a Higher Dose of Health Care</i><i>Good for the Portfolio?</i>

Trešl, Jiří; Payne, Brian C.; Karels, Gordon V.

doi:10.3905/joi.2014.23.1.053

Cited by 3 publications

(3 citation statements)

References 16 publications

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“…The finding for the Americas sample is in line with previous literature (e.g. Trsel et al (2014)), which observes an outperformance of US stocks, which represent the vast majority in our Americas sample. Just like the the global sample, the regional health care samples also show betas below one.…”

Section: Resultssupporting

confidence: 92%

“…However, literature covering the financial performance of health-care investments is scant. To the best of our knowledge, there is only one study that covers the performance of health care investments in detail (Trsel et al (2014)). Moreover, few studies focus on very special topics in health care performance (e.g., Bredthauer et.…”

Section: Introductionmentioning

confidence: 99%

“…(2015)), and several studies include health care among several branches in their samples (e.g., Fama and French (1997), Hong et al (2007)). Trsel et al (2014), the only study focusing solely on health care, examines the sector from an US view in a long term empirical analysis from 1926 to 2009. According to their data, health care stocks have generated economically significant risk-adjusted returns in the region of 1.8% to 3.5%, annually.…”

Section: Introductionmentioning

confidence: 99%

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The financial performance of the health care industry: a global, regional and industry specific empirical investigation

Dorfleitner

Rößle

2017

Eur J Health Econ

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This article analyzes the financial (out-) performance of all listed health care companies. The health care sector outperformed the market in the period from 2000 to June 2015. The performance was driven by companies from Americas, and Asia as well as companies from the pharmaceuticals sub-segment. Additionally, bull periods appear to be the main driver for the outperformance. Euro-based investors can expect different outcomes of their investments to those of USD investors. However, the main trends remain unchanged.

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Section: Resultssupporting

confidence: 92%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

The financial performance of the health care industry: a global, regional and industry specific empirical investigation

Dorfleitner

Rößle

2017

Eur J Health Econ

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Presidential parties, monetary regimes, and health care returns

et al. 2015

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Purpose – The purpose of this paper is to investigate the absolute and risk-adjusted stock return performance of the US health care industry conditional upon the presidential administration’s political party and the Federal Reserve’s monetary policy stance. It evaluates this return behavior across the 60-year time period from 1954 to 2013, and sub-divides this entire period into the pre-Medicare period (1954-1964), Medicare period (1965-1984), and Medicare-plus-high-health-care-inflation period (1985-2013). Design/methodology/approach – The study uses monthly returns to the health care industry and overall market, characterizing each sample month as either having a Republican or Democratic president and either a contractionary or expansionary monetary policy regime determined by whether the Federal Reserve is increasing or decreasing interest rates, respectively. It incorporates univariate and multivariate analysis to quantify the return behavior of both the health care industry and the overall market during the entire period and all three sub-periods. Additionally, it utilizes a common four-factor multivariate regression model and associated hypothesis testing to characterize risk-adjusted excess returns (i.e. α) to the health care industry during the entire period and all three sub-periods. Findings – The health care industry has earned robust, positive risk-adjusted returns with the magnitude of the returns sensitive to the political party of the administration and the monetary policy regime. The authors find that prior to 1965 (1954-1964), when the president was a Republican, during times of monetary contraction, health care earned an excess risk-adjusted return. There was no association between Democratic administrations and excess health care returns prior to 1965. In contrast, the authors find that after 1965 this relationship changes. The authors find that returns to health care were positive for Republicans during times of monetary expansion and positive for Democrats during monetary contraction. The authors also find this relationship has become more pronounced after 1984. Originality/value – The study extends prior literature, which has shown that the health care industry is a priced factor in the US stock market and that it provides significant risk-adjusted returns in the recent past. Uniquely, this study shows that the excess returns to health care vary considerably over the past 60 years, and that these excess returns are quite sensitive to political policy, proxied by the presidential administration party, and monetary policy, as measured using Fed discount rate changes. These findings have implications for management and shareholders of highly regulated and subsidized industries and firms.

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The Financial Performance of the Health Care Industry: A Global, Regional and Industry Specific Empirical Investigation

Dorfleitner

Roessle

2016

SSRN Journal

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This article analyses the financial (out-) performance of all listed health care companies. The health-care sector outperforms the market in the period from 2000 to June 2015. The performance is driven by companies from Americas and Asia as well as companies from the pharmaceuticals sub-segment. Additionally, bull periods appear to be the main driver for the outperformance. Eurobased investors can expect different outcomes of their investments to those of USD investors. However, the main trends remain unchanged.

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Health Care Investing:Is a Higher Dose of Health CareGood for the Portfolio?

Cited by 3 publications

References 16 publications

The financial performance of the health care industry: a global, regional and industry specific empirical investigation

The financial performance of the health care industry: a global, regional and industry specific empirical investigation

Presidential parties, monetary regimes, and health care returns

The Financial Performance of the Health Care Industry: A Global, Regional and Industry Specific Empirical Investigation

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