SustainAbility: The healthy theme

At Royal London Asset Management our sustainable funds are built around four core sustainability themes: Clean, Healthy, Safe, and Inclusive. We seek out companies that make a positive contribution to one or more of these themes, both through what they offer (their products and services) and how they operate.

To qualify, at least half of a company’s revenues must come from activities aligned with these sustainability themes. The aim of this thematic approach is to ensure that our investments are financially robust, while supporting a more sustainable future. 

The ‘healthy’ theme 

Our health is at the heart of all our lives, but it’s increasingly at the heart of our economy as well. Most developed countries spend over 10% of their GDP on healthcare, and healthcare companies make up around 9% of global stock market indices. 

Our health is at the heart of all our lives, but it’s increasingly at the heart of our economy as well.

You might be forgiven for thinking that healthcare companies solely focus on selling medicines. Innovation into new therapies and treatments is complemented by companies focused on improving access to healthcare and making these medicines more affordable. However, pharmaceuticals are only one piece of the puzzle. 

From the operations room (where your surgeon might well be accompanied by a robot) to the processing room that sterilises instruments, our businesses can be found supporting hospitals in providing care to patients. And some are involved behind the scenes, providing the equipment, tools and services which help to bring new medicines from a molecule brimming with potential, to a blockbuster drug.  

Why ‘healthy’ companies can make good investments 

Although spending on healthcare dipped after the exceptional growth experienced during the pandemic, over the long-term demand for healthcare continues to grow. Scientific discoveries have helped us to deliver new and exciting medicines, but just as important has been the step up in life expectancy. Improvements in our health during early and working-age life mean more of us now live longer, and as we reach old age our demand for healthcare both to pre-empt disease, and treat it, rises. Companies which benefit from these trends can reap the benefit from successful research and development and tend to offer durable long-term growth. 

For professional investors only. This material is not suitable for a retail audience. Capital at risk. This is a financial promotion and is not investment advice. Past performance is not a guide to future performance. Reference to any security is for information purposes only and should not be considered a recommendation to buy or sell.

The value of investments and any income from them may go down as well as up and is not guaranteed. Investors may not get back the amount invested. Portfolio characteristics and holdings are subject to change without notice. The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change. Forward looking statements are subject to certain risks and uncertainties,  Actual outcomes may be materially different from those expressed or implied.