Dive Brief:
- Some major investors are shifting their focus from technology to healthcare.
- Healthcare stocks in the Standard & Poor's (S&P) 500 index saw 10 straight days of inflows, which Bloomberg says is the longest streak since October of 2012.
- Over the same time period, technology companies were seeing an outflow.
Dive Insight:
Under the Affordable Care Act (ACA), the healthcare sector has millions of new customers, which is why it's projected to see the strongest profit growth of any S&P 500 group in the second quarter of 2015. “Health care has clearer visibility of earnings than a lot of other sectors,” Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird, told Bloomberg Business. “The demographics certainly favor health care in the long term.”
The S&P 500 leaders for most of this year have been pharmaceutical, biotechnlogy and healthcare services company stocks, with a year-to-date gain of 9.2%. Technology shares, which are now in third place among the S&P's top 10 groups, have advanced only 2.6%.