Thursday, April 2, 2015

The Big Winner: Health Care

Amid a generally uneventful quarter for the stock market, the biggest winners were health care stocks. The S&P 500 Health Care Index rose 6.2 percent during the first quarter of 2014, easily the top performer among the S&P's ten sectors. The S&P itself was up just 0.4 percent.

This marked the third straight quarter that health-care stocks have done better than the overall S&P 500, as well as 11 out of the last 16 quarters. They've even been outperforming over the long haul: While the S&P as a whole has gained 206 percent since bottoming out in March 2009,  the health-care sector is up 233 percent.

There's a simple reason for this outperformance: profits. Since 2012, profits among S&P 500 health-care stocks have more than doubled those of the broader index, 27 percent to 13 percent.

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