Thematic Equity Investing Digital Health
An Investment Solution to Exploit the Interface between Digitalization and Medicine
Why invest in digital health?
The medical world is far from immune to the effects of the digital revolution; indeed, the health care sector offers particularly fertile ground for the methods and tools used in digitalization. Many areas of research in medicine today, such as genetic sequencing or the genetic analysis of entire population groups, feature an extremely high density of data. Support from systems equipped with artificial intelligence can considerably speed up this kind of work. Digitalization also allows existing processes to be applied in a way that is not only more precise, but also faster and entails fewer side effects – a prime example being robots in operating theaters. Finally, with factors such as the increasing complexity of modern medicine and demographic changes (for example the aging population) driving health care costs upward at an alarming rate, digitalization can also help by improving efficiency through digital process optimization.
This constellation makes digital health a real growth market.
Despite the obvious synergies and advantages offered by digitalization in the health care sector, it is still early days. The corresponding know-how has to be built up, companies established and technology adapted. However, the prerequisites for a major leap forward are certainly there. This is illustrated not least by the fact that we have successfully established a broad-based portfolio with “pure play” stocks – those in companies that generate at least half of their revenues in the area of digital health. Only a few years ago, there was simply no such market depth.
We believe now is an auspicious time to invest. On one hand, the market has matured significantly, a regulatory framework provides stability and the technologies are sufficiently established so as to allow for a broad market and diversification. On the other hand, the topic is still fresh enough for investors to secure the benefits of an early move into the market.