With markets becoming increasingly volatile, investors are understandably looking for places to hide. One sector that has quietly been doing quite well is healthcare. Over the past three months, healthcare stocks have gained over 11%, compared with roughly 3% for the broader market. Apparently, while everyone has been busy debating whether AI will take over the world, people have continued getting older and needing healthcare.

Source: LSEG T1 [.SPX-UT] [.SPSHC-SP]. Data as of Oct 22, 2026

What makes healthcare interesting to us is its combination of defence and growth. People don't stop taking medications, visiting doctors, or needing medical procedures because the economy slows down. This makes many healthcare companies less sensitive to economic cycles than other businesses.

But healthcare is not simply a defensive investment. Aging populations, advances in cancer treatments, weight-loss medications, and medical technology are creating significant long-term growth opportunities. Even artificial intelligence is playing a role, helping companies improve diagnostics and accelerate drug development.

There are certainly risks. Government regulation, drug pricing, and rising healthcare costs can affect profitability, and not every company in the sector is inexpensive. However, after years in which technology dominated investor attention, healthcare is beginning to attract interest for a different reason: a combination of relatively predictable demand, innovation, and
earnings potential.

We remain positive on the broader equity markets, but periods of volatility remind us why diversification matters. We don't need every company in a portfolio to be at the centre of the latest technological revolution. Sometimes, the businesses doing the less glamorous work can provide some of the most valuable stability.

Healthcare may not be the most exciting investment story in the market, but occasionally a little less excitement can be what a portfolio needs.

I have also included a piece from our CIBC Economics Team entitled “We beg to differ”.

As always, if you have any questions, please feel free to give us a call at any time.

Have a great weekend.

Milan