ISSUE 32: 2017

Future Perspective

Technology Gives Healthcare an Adrenaline Shot

With technology generating futuristic advances, look for investment opportunities within healthcare — and beyond.

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Illustrations by Stuart Bradford.
 

The silicon chip and the stethoscope have long gone hand in hand. Indeed, Moore’s Law, a widely used forecast of rising computing power, can often seem to be nudging healthcare into the realm of science fiction, with life-saving high-tech innovations coming at a rapid rate today — and plenty more in the pipeline. That could be good news for investors, and not only those with a medical focus. 

The Facts of Innovation Click to expand

“The potential for growth extends beyond the traditional healthcare sector,” says Sarbjit Nahal, head of thematic research at BofA Merrill Lynch Global Research.** With the provision that rising chip speed can render a promising technology obsolete all too quickly (DVD, say hello to cloud streaming), here are the top five innovations Nahal and fellow “futurologist” Joseph Quinlan, head of market & thematic strategy at U.S. Trust, think may offer investment opportunities in the years ahead. 

Also showing strong vital signs

Beyond these top five, Quinlan and Nahal see potential in an array of other healthcare-related technologies currently in development. Here are a few: 

  • Contact lenses that measure glucose levels in diabetics 
  • Spoons with accelerometers that adjust for the shaking common in patients with Parkinson’s 
  • Nano pills that travel through the body and identify cancer cells or signs of an imminent heart attack 
  • Multifunctional radiology that scans the body and detects a range of medical problems all at once — not unlike the “tricorder” used in the Star Trek franchise
  • Smartphone apps that collect a range of health data and send it to healthcare providers 
  • 3D-printed replacement body parts such as organs, bones, tendons and more 

Other drivers in healthcare

Beyond the potential of technology to create investment opportunities in healthcare, there are other prospective drivers, says Joseph P. Quinlan, head of market and thematic strategy at U.S. Trust. “One of the major factors our A Transforming World approach has identified is the aging of America,” he says. “The share of people living to 100 and over rose more than 40 percent between 2000 and 2014. Another is the spread to emerging markets of so-called Western diseases such as obesity and diabetes. The diabetes rate in China, for instance, doubled between 2001 and 2013, with nearly 12 percent of adults now afflicted. By some measures that’s even greater than the U.S. rate.” 6,7

To learn more about med-tech, or about how healthcare-related investments may fit into your portfolio strategy, contact your U.S. Trust advisor.

6 Centers for Disease Control and Prevention, National Vital Statistics System, Mortality, 2014.

7 Journal of the American Medical Association, 2013.

IMPORTANT INFORMATION

Investing involves risk. There is always the potential of losing money when you invest in securities.

Some of the featured participants are not employees of U.S. Trust. The opinions and conclusions expressed are not necessarily those of U.S. Trust or its personnel. Any of their discussions concerning investments should not be considered a solicitation or recommendation by U.S. Trust and may not be profitable.

Past performance is no guarantee of future results. Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.

Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.

OTHER IMPORTANT INFORMATION

Equities Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

Technology stocks may be more volatile than stocks in other sectors.

International Investing International investing involves special risks, including foreign taxation, currency risks, risks associated with possible differences in financial standards, and other risks associated with future political and economic developments.

Investing in emerging markets may involve greater risks than investing in more developed countries. In addition, concentration of investments in a single region may result in greater volatility.

Healthcare This material should be regard as general information on healthcare considerations and is not intended to provide specific healthcare advice. If you have questions regarding your particular healthcare situation, please contact your health care, legal or tax advisor.

** BofA Merrill Lynch Global Research is equity research produced by Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) and/or one or more of its non-U.S. affiliates. MLPF&S is a wholly owned subsidiary of Bank of America Corporation. Any information presented in connection with BofA Merrill Lynch Global Research is general in nature and is not intended to provide personal investment advice.The information does not take into account the specific investment objectives, financial situation and particular needs of any specific person who may receive it. Investors should understand that statements regarding future prospects may not be realized.

Projections are subject to change.

All sector recommendations must be considered by each individual investor to determine if the sector is suitable for their own portfolio based upon their own goals, time horizon, and risk tolerances.


Illustrations by Stuart Bradford.
 

The silicon chip and the stethoscope have long gone hand in hand. Indeed, Moore’s Law, a widely used forecast of rising computing power, can often seem to be nudging healthcare into the realm of science fiction, with life-saving high-tech innovations coming at a rapid rate today — and plenty more in the pipeline. That could be good news for investors, and not only those with a medical focus. 

The Facts of Innovation Click to expand 

“The potential for growth extends beyond the traditional healthcare sector,” says Sarbjit Nahal, head of thematic research at BofA Merrill Lynch Global Research.** With the provision that rising chip speed can render a promising technology obsolete all too quickly (DVD, say hello to cloud streaming), here are the top five innovations Nahal and fellow “futurologist” Joseph Quinlan, head of market & thematic strategy at U.S. Trust, think may offer investment opportunities in the years ahead. 

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Also showing strong vital signs

Beyond these top five, Quinlan and Nahal see potential in an array of other healthcare-related technologies currently in development. Here are a few: 

  • Contact lenses that measure glucose levels in diabetics 
  • Spoons with accelerometers that adjust for the shaking common in patients with Parkinson’s 
  • Nano pills that travel through the body and identify cancer cells or signs of an imminent heart attack 
  • Multifunctional radiology that scans the body and detects a range of medical problems all at once — not unlike the “tricorder” used in the Star Trek franchise
  • Smartphone apps that collect a range of health data and send it to healthcare providers 
  • 3D-printed replacement body parts such as organs, bones, tendons and more 

Other drivers in healthcare

Beyond the potential of technology to create investment opportunities in healthcare, there are other prospective drivers, says Joseph P. Quinlan, head of market and thematic strategy at U.S. Trust. “One of the major factors our A Transforming World approach has identified is the aging of America,” he says. “The share of people living to 100 and over rose more than 40 percent between 2000 and 2014. Another is the spread to emerging markets of so-called Western diseases such as obesity and diabetes. The diabetes rate in China, for instance, doubled between 2001 and 2013, with nearly 12 percent of adults now afflicted. By some measures that’s even greater than the U.S. rate.” 6,7

To learn more about med-tech, or about how healthcare-related investments may fit into your portfolio strategy, contact your U.S. Trust advisor.

Centers for Disease Control and Prevention, National Vital Statistics System, Mortality, 2014.

Journal of the American Medical Association, 2013.

IMPORTANT INFORMATION

Investing involves risk. There is always the potential of losing money when you invest in securities.

Some of the featured participants are not employees of U.S. Trust. The opinions and conclusions expressed are not necessarily those of U.S. Trust or its personnel. Any of their discussions concerning investments should not be considered a solicitation or recommendation by U.S. Trust and may not be profitable.

Past performance is no guarantee of future results. Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.

Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.

OTHER IMPORTANT INFORMATION

Equities Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

Technology stocks may be more volatile than stocks in other sectors.

International Investing International investing involves special risks, including foreign taxation, currency risks, risks associated with possible differences in financial standards, and other risks associated with future political and economic developments.

Investing in emerging markets may involve greater risks than investing in more developed countries. In addition, concentration of investments in a single region may result in greater volatility.

Healthcare This material should be regard as general information on healthcare considerations and is not intended to provide specific healthcare advice. If you have questions regarding your particular healthcare situation, please contact your health care, legal or tax advisor.

** BofA Merrill Lynch Global Research is equity research produced by Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) and/or one or more of its non-U.S. affiliates. MLPF&S is a wholly owned subsidiary of Bank of America Corporation. Any information presented in connection with BofA Merrill Lynch Global Research is general in nature and is not intended to provide personal investment advice.The information does not take into account the specific investment objectives, financial situation and particular needs of any specific person who may receive it. Investors should understand that statements regarding future prospects may not be realized.

Projections are subject to change.

All sector recommendations must be considered by each individual investor to determine if the sector is suitable for their own portfolio based upon their own goals, time horizon, and risk tolerances.