Buy now: the boom in digital healthcare has only just begun

The pandemic has proved an ideal backdrop for the digital-health sector – but this has been a compelling investment theme for years. Listed companies in the industry have long been outpacing the wider stockmarket, while the amount being invested by new start-up businesses keeps shattering records.

Researchers see ample scope for further expansion. Covid-19 is likely to mark not a one-off bubble for the industry but the start of pervasive structural change. Investors should view the health-technology transformation as a multi-year investment opportunity in its infancy.

Digital-health stocks as measured by the US dollar-denominated MSCI ACWI IMI Digital Health index have returned nearly 18% a year since early 2013, significantly outperforming global stocks’ 10.8%. Over three years, the figures are nearly 22% versus 17.3% respectively. Digital-health stocks have beaten the broader market in six of the past seven calendar years and are roughly even in 2021 so far.

This index is