Each year, on 7 April, the World Health Organization marks World Health Day, highlighting a key issue shaping global wellbeing. In 2026, the theme “Together for health. Stand with science.” underscores the growing importance of collaboration in tackling complex health challenges across people, animals, and the environment.
It is hard to overstate how far healthcare has come over the past century. Advances in medicine, diagnostics and public health have transformed life expectancy and quality of life. Today, that momentum continues at pace. From breakthroughs in biotechnology to innovations in diagnostics and drug development, the sector is entering what many describe as a new era of innovation.
At the same time, the broader investment backdrop remains uncertain. 2026 has already reminded investors that geopolitical tensions and policy shifts can create volatility. Against this backdrop, building resilient portfolios is key and healthcare has long played an important role in achieving that balance.
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Why healthcare matters for investors
Healthcare is a vast and diverse sector. It includes everything from pharmaceutical giants like AstraZeneca to smaller, highly specialised firms developing cutting-edge therapies in laboratories. It also spans hospitals, insurers, equipment manufacturers and even real estate providers supporting healthcare delivery.
What unites these businesses is strong and persistent demand. Trillions are spent globally each year on healthcare services, infrastructure and innovation. This demand is underpinned by powerful structural drivers: ageing populations across developed economies; rising prevalence of chronic conditions; and continuous innovation in treatments and technologies.
Importantly, much of this demand is non-discretionary. People require healthcare regardless of economic conditions, which helps support relatively stable revenues. While the sector is not immune to downturns, it has historically shown defensive characteristics, often providing downside protection when markets are under pressure.
After a period of underperformance in 2025, valuations in parts of the healthcare sector now appear attractive relative to history. Luyi Guo, research analyst at Janus Henderson, recently said: “2026 is shaping up to be a catalyst‑rich year, with a number of highly anticipated drug launches, clinical trial readouts, and regulatory decisions across several major treatment areas.”
How we access healthcare in the VT Chelsea Managed Funds
Within the VT Chelsea Managed range, healthcare is an important component of our diversified approach to investing. One of the most compelling aspects of healthcare investing is the balance between innovation and stability. On one hand, the sector is at the forefront of scientific discovery. On the other, it provides essential services that societies depend on.
A longstanding holding has been Polar Capital Biotechnology, which provides exposure to some of the most innovative areas of the market. Biotechnology can be volatile, but it also offers significant growth potential driven by scientific breakthroughs and pipeline development.
More recently, in late 2025, we added Polar Capital Global Healthcare Trust. This broadened our exposure across the sector, combining established leaders, such as AstraZeneca, with smaller, disruptive companies pushing the boundaries of medical innovation.
There are several reasons we favour this exposure
- Attractive valuations: following recent underperformance, many healthcare stocks are trading at below-average levels, despite strong long-term prospects.
- Defensive qualities: demand for healthcare products and services tends to remain steady, even during economic slowdowns.
- Low correlation: healthcare can behave differently from other sectors, helping to diversify portfolios.
We also gain exposure through healthcare-related real assets. For example, the funds include positions in healthcare real estate, such as GP surgery owner PHP. These assets often benefit from long-term, inflation-linked leases and strong tenants (frequently backed by the NHS in the UK) providing stable and predictable income streams. Compared with traditional commercial property, healthcare real estate has historically shown more resilient occupancy and lower volatility.
Additional funds with meaningful healthcare exposure
While some funds specialise directly in healthcare, others build meaningful exposure because the theme aligns naturally with their broader investment approach, particularly in the US, which remains the global hub for healthcare innovation.
The US market is home to many of the world’s leading pharmaceutical, biotechnology and life sciences companies. As a result, growth-focused US equity funds often hold an overweight position in healthcare, reflecting both the scale of opportunity and the sector’s long-term earnings potential.
This is evident in several funds. Baillie Gifford American has a notably higher allocation to healthcare at 17.3%, compared with 9.6% for its benchmark*, underlining its focus on innovative, high-growth companies. Similarly, T. Rowe Price US Smaller Companies Equity holds 15.2% in the sector, including exposure to businesses such as Elanco Animal Health**, which ties closely to the World Health Day “One Health” theme of interconnected human, animal and environmental health. GQG Partners US Equity** and Premier Miton US Opportunities*** also maintain modest overweights to healthcare, recognising its combination of structural growth drivers and defensive characteristics.
In the UK, exposure looks slightly different but remains significant. Janus Henderson UK Responsible Income has 13.5% allocated to healthcare, with AstraZeneca as its largest holding**. This highlights how healthcare can offer both resilience and the potential for sustainable dividends.
The Chelsea view
Healthcare remains one of the most dynamic and essential sectors in the global economy. It sits at the intersection of innovation, demographics and societal need, offering a unique blend of growth potential and resilience. For investors, the challenge is not whether healthcare will continue to evolve, but how best to access those opportunities. Within the VT Chelsea Managed Funds, we aim to capture this through a diversified approach: combining specialist funds, broader global exposure and complementary assets, such as healthcare real estate.
