The Placebo Effect: Healthcare's Defensive Reputation Under the Microscope

By: Tom Deacon, Assistant Portfolio Manager at Mint Asset Management. (Image: Supplied)

Healthcare has earned its defensive reputation. Demand for respiratory support, plasma therapies, sleep-apnoea masks and cochlear implants don’t flow with typical business cycles. Cash flows are sticky and the sector tends to hold up when stocks fall. By the way, that still worked in 2026: on the days the MSCI World IT index dropped ~2% or more, world healthcare beat tech by roughly ~3% on average.

And yet the sector has been no safe harbour. It was unloved for most of 2025 - in August of that year it traded ~30% below global equities, its widest discount in over a decade, before a 4Q25 bounce. Then it lagged again into 2026, ranking among the weakest S&P sectors year-to-date and at near-record-low relative earnings multiples. So, why in recent times has healthcare behaved as a sector so differently to investors normally expect?

The diagnosis