Investing in healthcare & pharma: health is wealth

Investing in a basket of US healthcare and pharma stocks played a crucial role in providing ballast to our portfolios in what proved to be a turbulent 2022 for equity and bond markets alike. We initiated an overweight allocation to the US healthcare sector in early H2 of 2021 when the S&P 500 was at record highs, having marked its second-best H1 performance in over two decades.

With stretched equity valuations, inflation embroiling the global economy and the prospect of slowing growth, we decided to take profit on some of our more cyclical holdings and increase exposure to quality stocks trading at reasonable valuations; the US healthcare sector fit this bill. A return in demand for elective procedures, medical equipment and diagnostics following long-endured covid lockdowns was supportive for the sector.

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We also saw upside from the strong drug development pipeline for a number of pharmaceutical companies.

The position has outperformed global equities by over 22% since inception (performance is priced in GBP to reflect the unhedged foreign exchange exposure).
A closer look at the position in 2022 shows positive returns were generated in a down market.

Coming into 2022, our conviction in the sector grew stronger and we increased our position. With the tragic Russia-Ukraine conflict adding to the plethora of existing supply-side pressures, the inflation narrative grew stronger and company pricing power became increasingly important. The inelastic demand for healthcare goods and services better positioned these companies to protect their margins which I referred to in a State Street and Investment Week roundtable here.

Historically, investing in large-cap healthcare has provided a defensive return profile, outperforming in the majority of market drawdowns which was in keeping with our outlook for heightened volatility. Our view that the Federal Reserve was behind the curve last year played into our preference for healthcare stocks with their robust balance sheets suiting them to higher rate environments.

The healthcare sector was trading at over a 20% discount to the market when we entered the position, close to two standard deviations below its 10-year mean. It now trades close to its average following its strong outperformance.
The chart shows gross margin and QoQ gross margin volatility for the S&P 500 ex Financials. The Healthcare sector has one of the highest 10-year average gross margins in the S&P 500 along with some of the greatest margin stability highlighting the sector’s strong pricing power.

While we may look to take profit on our US healthcare position as the macroeconomic backdrop evolves and new opportunities arise, we continue to like the longer-term structural tailwinds behind the sector from changing demographics to technological advancements. The World Health Organisation projects the world’s population aged 60 and over will double by 2050 and those aged 80 and over will triple, driving secular demand for a host of healthcare products and services.

This demand will be further compounded by rising real disposable income across emerging nations. Technological innovation is another key secular growth driver behind the pharma industry with R&D remaining firmly on an upward trajectory benfitting areas across medical devices, therapeutics, robotics and data-driven value-based care to name a handful.

Coming back to the macroeconomic landscape, we are cognisant of the risk-on rally in recent weeks with the market pricing in interest rate cuts later this year in the US and the prospect of a ‘soft landing’. We believe a contraction in earnings remains a downside risk to market multiples, particularly in a recessionary scenario. We therefore retain our defensive stance and overweight to US healthcare with an eye to tactically take profit when we gain greater conviction in a shift in the macro picture that could favour sustained momentum in some of 2022’s laggards.

Senior Portfolio Manager – Equities
Sekar is responsible for managing the team’s equity investments.

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Paul Hunt


Paul Hunt is a proven business leader and entrepreneur with over 30 years’ experience and track record of scaling businesses across multiple sectors. Hunt is highly experienced in business turnarounds, strategic planning and creating a positive people culture geared for success.

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David Chandler

Portfolio Assistant

David is responsible for providing operational support to the fund managers. David has passed the CFA UK IMC and graduated in 2018 with a degree in Economics and Business Management from the University of Sheffield.

James Peel, CFA

Portfolio Manager – ESG

James is a Portfolio Manager at Titan Asset Management and is responsible for Titan’s approach to sustainable investing. He previously worked as a researcher at the British Chamber of Commerce in Taipei. James graduated in 2018 from the University of St Andrews, where he studied economics. He is a CFA charter holder and has passed the CFA UK Investment Management Certificate (IMC), the CFA UK Certificate in ESG Investing, and the CFA UK Certificate in Climate and Investing (CCI).

Jonah Levy, CFA

Portfolio Manager – Physicals

When not collecting various minerals and mining memorabilia, Jonah can be found managing the physical allocations at Titan Asset Management. Prior to Titan he worked at Tavistock Wealth for 3 years, having previously gained experience in Holland at an oil brokerage, and in London at an energy trading house. Jonah is a CFA charter holder, having graduated from St. Andrews University with an MA in Management and Economics.

Alex Livingstone, CFA

Head of Trading – FX & ETFs

Alex is responsible for the ETF trading and FX strategy at Titan Asset Management and has executed over £5 billion of trades during his prior 4 years at Tavistock Wealth. Alex also assists in the wider portfolio management of the CIP specialising in technical analysis and risk management. He is a CFA charter holder and holds an BSc in Retailing, Marketing and Management from Loughborough University.

Sekar Indran, CFA

Senior Portfolio Manager – Equities

Sekar is responsible for managing the team’s equity investments. He helped expand the investment proposition over five years at Tavistock Wealth and continues this role at Titan Asset Management. Sekar has prior financial services experience at Barclays and Allianz. He is a CFA charter holder and holds a BSc degree in Industrial Economics from the University of Nottingham.

John Leiper, MSc, CFA, FDP, CFTe

Chief Investment Officer

John Leiper is the Chief Investment Officer of Titan Asset Management and carries direct responsibility for all investments in the Centralised Investment Proposition (CIP) at the firm. John has 15 years’ experience in financial markets having previously worked in a variety of roles at RBS, Morgan Stanley, Credit Suisse and Tavistock Wealth. John Leiper is a CFA and FDP charter holder and a member of the Society of Technical Analysts. He holds a BSc degree in Economics from Warwick University and an MSc degree in Economic History from the London School of Economics.

Matthew Cureton


Matthew has been an intrinsic part of Haibun (now Titan Alternatives) since its formation. As a Co-Founder, he has focused on developing relationships with clients, providers, and companies seeking funding.

Matthew’s personal involvement with the fund-raising activities at Titan Alternatives starts at the very beginning of each journey.

Incorporating the due diligence process, meeting with the various management teams, and visiting companies on site, to then being involved with the marketing documents, hosting presentations, and facilitating the investments for clients. Matthew also continues to monitor and report on the investment throughout its life, which has included him taking on Non-Executive Directorships or observer roles on various company boards.