A Resilient and Evolving Sector Amid Political Shifts

The healthcare sector is navigating a dynamic political landscape, most notably under US President Trump’s administration. His sweeping changes—such as halting vaccine guidance, defunding Moderna’s bird flu program, and removing the CDC’s vaccine advisory panel—have certainly impacted vaccine-centric names like Pfizer, Moderna, and Novavax. However, the broader sector has proven resilient. Healthcare’s diversification, spanning pharmaceuticals, diagnostics, and medical technology, provides insulation from policy shocks. In fact, some investors view the pivot toward preventive care, environmental health, and regulatory reform as a catalyst for long-term innovation across the industry.

Tariff Risks Managed Through Domestic Investment

While broader trade tensions remain on the radar, the healthcare sector appears far less vulnerable than others. Tariff threats on drug imports, which account for over $200 billion annually, are being closely watched. Yet, unlike industries such as airlines, major pharmaceutical firms have voiced confidence during earnings calls, emphasizing limited tariff impact. This confidence is backed by substantial commitments to U.S.-based manufacturing. Companies like Abbott, Merck, J&J, Sanofi, and Roche have announced investments ranging from hundreds of millions to tens of billions to expand domestic operations—bolstering supply chain resilience and potentially qualifying for tariff exemptions.

Healthcare’s Long-Term Growth Story Remains Intact

Healthcare’s appeal as a defensive sector remains strong. The day after Liberation Day, the S&P Healthcare sector fell just 0.79%—a fraction of the S&P 500’s 4.83% decline¹—highlighting its role as a defensive sector. Structural tailwinds further strengthen the case: an aging global population, rising middle-class demand for quality care, and breakthroughs in obesity and metabolic treatments are propelling steady revenue growth. Blockbuster drugs like Ozempic and Zepbound are expanding their addressable markets, moving from diabetes into cardiovascular disease and weight management.

Innovation Driving the Future of Healthcare

Innovation is another key tailwind. Artificial intelligence is reshaping drug development by accelerating R&D timelines, improving clinical trial precision, and enabling personalized medicine. Meanwhile, advances in medical devices—from surgical robotics to smart implants—are enhancing outcomes and broadening access to minimally invasive care. These themes support a long runway for growth across sub-sectors of healthcare.

Evolve Global Healthcare Enhanced Yield Fund (TSX: LIFE)

For investors looking to participate in this resilient and forward-looking sector, LIFE offers a compelling opportunity. Its covered call strategy provides exposure to healthcare giants while generating income and smoothing volatility—especially valuable in uncertain macro environments. With strong fundamentals, ongoing innovation, and reduced sensitivity to political noise compared to other sectors, healthcare continues to offer an attractive mix of stability and opportunity.

¹Source: Bloomberg, as at June 18, 2025.

Source: Getty Images Credit: Issarawat Tattong

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Published July 2, 2025.

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