Question: I watched the interview with Rudi Filapek-Vandyck by Peter during the week and he spoke about the healthcare sector in Australia. I am looking at ETFs like IXJ for overseas exposure to the sector. What is your view? Is it going to grow like the Australian patch?
Answer (By Paul Rickard): If there is one industry I would be inclined to back and invest globally in, that is healthcare.
One of the easiest ways to do it is through iShares Global Healthcare ETF, ASX code IXJ.
One caveat – the stocks that make up the index are trading on a multiple of a touch under 29 – so it is arguably pretty pricey.
Maybe it is something to buy during market weakness.
Question 2: What about the next tier of banks, like AMP or BOQ, etc. Are they likely to see more serious growth as the demand for lending increases with the economy picking up?
Answer 2 (By Paul Rickard): I am in the camp that the minor/regional banks have already had their run. If you look at the performance over the last two years, you will see that most of the regional banks have outperformed the major banks (Commonwealth Bank largely excepted).
Going forward, I don’t quite see the evidence for continued outperformance. They could be winners from the Murray Inquiry (question whether some of this may be already priced in) – my sense is that their biggest risk will be lack of investment in technology.
So, I am not inclined to make the switch into the regionals.
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