As the coronavirus crisis continues to escalate around the world, global equity markets are becoming increasingly volatile. Despite a promising rally late on Friday afternoon, the S&P/ASX 200 Index (ASX: XJO) suffered its worst single-day fall since 1987 on Monday, shedding a whopping 9.7%. This continues a horror slide for the index, which has lost over 30% of its value so far in 2020.
But if you’re looking for something of a silver lining, at least not all areas of the market have been affected equally: the ASX health care index is only down 3.3% so far in 2020 at the time of writing.
This shows the benefits of diversifying into healthcare. This is a defensive sector, and one which will be actively engaged in the coming months in the fight against the spread of coronavirus both here and abroad.
If you’re tired of watching the daily pendulum swings of your portfolio, here are 3 leading ASX healthcare shares that could help shield you from the worst of the current spate of market volatility.
CSL Limited (ASX: CSL)
ASX biotechnology company CSL specialises in the development of influenza vaccines and treatments for rare diseases. Despite recent selloffs in the market, CSL shareholders are still sitting on gains of 2% so far this year (at the time of writing) and might be forgiven for wondering what all the fuss is about.
While the development of a vaccine for the coronavirus is outside the scope of CSL’s daily operations, the company did recently announce it was lending its expertise to the University of Queensland in their research into a potential vaccine.
Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)
Fisher & Paykel Healthcare specialises in the treatment of respiratory illnesses including sleep apnoea. Remarkably, back in February, the New Zealand-based company announced that it had actually seen an increase in demand in China following the coronavirus outbreak. It upgraded its FY20 profit guidance from between NZ$255 million to NZ$265 million to a new range of NZ$260 million to NZ$270 million.
If you were just looking at a chart of the Fisher & Paykel Healthcare share price, you wouldn’t believe we were currently suffering through our worst market crash since the crashes of 2008 or 1987. The company’s share price has marched steadily upwards, even gaining 4% on Monday while the rest of the market nosedived. So far in 2020, Fisher and Paykel Healthcare is up close to 19% at the time of writing.
ResMed Inc (ASX: RMD)
Like Fisher & Paykel, ResMed specialises in the treatment of respiratory-related illnesses such as sleep apnoea and chronic obstructive pulmonary disease. Given that many of the most severe symptoms of coronavirus are respiratory, ResMed’s medical devices may be employed in the fight against the disease. Its share price has also held up reasonably well so far this year, advancing a little over 2% to $22.39 as at the time of writing.
ResMed hasn’t made an announcement to the market directly addressing the impacts of the coronavirus on its outlook for FY20. However, given the fact that Fisher & Paykel upgraded its profit guidance, perhaps ResMed may also see some revenue upside from the current crisis.
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Rhys Brock has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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