Why Healthcare Equities Remain a Long-Term Investment Story

According to a 2022 Statistics Canada report, nearly one in five people is over the age of 65, a proportion expected to rise to almost 25% (1 in 4 people) by 2068. The World Health Organization projects that, in 25 years, there will be 2 billion people aged 60 and older globally. That’s roughly double the current number.

According to the Public Health Agency of Canada, 73% of Canadian adults aged 65+ live with at least one chronic condition. Older adults are more likely to live with chronic illnesses — including heart disease, diabetes, arthritis, and cancer — which require sustained care and medication. This long-term, often complex, care tends to generate steady demand for pharmaceuticals, medical devices, diagnostics, and home-based care — areas where large global healthcare firms are heavily involved.

Across much of the world, healthcare spending is climbing faster than the economy itself — and Canada is no exception. According to the Canadian Institute for Health Information, health care spending in Canada is expected to reach $372 billion in 2024, or about $9,054 per person. That would represent 12.4% of national gross domestic product (GDP), the highest share ever recorded outside the pandemic years.

CIHI attributes this growth to structural drivers such as an aging population, higher wage pressures in hospitals, and continued post-pandemic system strain.

The global push toward universal health coverage is creating structural tailwinds for healthcare providers and pharmaceutical companies.

“Scaling up primary health care (PHC) interventions across low and middle-income countries could save 60 million lives and increase average life expectancy by 3.7 years by 2030," the World Health Organization noted in a 2025 fact sheet.

For global healthcare firms, particularly those focused on vaccines, diagnostics, and affordable treatments, this unmet demand represents a significant — and moral — imperative.

In Canada, while universal healthcare covers many essential services, gaps remain in areas like prescription drug coverage and mental health services. Canadian firms and public institutions such as WHO have increasingly taken part in global health partnerships, contributing to initiatives like the Access to COVID-19 Tools ACT Accelerator and Gavi, the Vaccine Alliance.

For multinational healthcare providers, this expanding access — though uneven — points to a significant long-term need, particularly for vaccines, diagnostics, and affordable treatments.

The COVID-19 pandemic thrust the vaccine industry into the global spotlight, but the momentum hasn’t stopped. As of 2024, dozens of late-stage vaccine candidates are being developed for diseases ranging from malaria and RSV to cancer.

Canada, notably, continues to invest in domestic life sciences. In 2023, the federal government announced $1.5 billion in new funding over five years to support Canadian vaccine and biomanufacturing development. These efforts hope to help integrate Canadian firms and research institutions into the global healthcare innovation ecosystem.

Beyond vaccines, biotechnology and gene-based therapies are also reshaping the future of medicine. The number of new drug approvals continues to rise, with regulatory bodies in the U.S., Canada, and Europe green-lighting dozens of new biologics and targeted therapies each year.

Large healthcare firms play a central role in these developments. Their research and development pipelines are contributing to medical innovation. That has the potential for significant public health benefits and shareholder value.

Of course, healthcare equities aren’t immune to market volatility. Regulatory hurdles, patent cliffs, and pricing scrutiny can all lead to sharp selloffs. For investors with a long-term horizon, these risks are often part of the journey.

What provides healthcare investing some resilience isn’t that it’s immune to economic cycles, but that the underlying demand is structurally supported. People don’t stop needing medicine or surgeries during a recession. And as more of the world gains access to care, the market should grow.

Global healthcare equities reflect a complex but potentially enduring set of long-term drivers — from aging demographics and increasing healthcare expenditures to expanding access and scientific innovation. For investors with a long-term perspective and appropriate risk tolerance, the sector may offer diversified exposure to a global need that is unlikely to diminish.

Commissions, management fees and expenses all may be associated with an investment in products (the “Global X Funds”) managed by Global X Investments Canada Inc. The Global X Funds are not guaranteed, their values change frequently and past performance may not be repeated. The prospectus contains important detailed information about the Global X Funds. Please read the relevant prospectus before investing.

This communication is intended for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase investment products (the “Global X Funds”) managed by Global X Investments Canada Inc. and is not, and should not be construed as, investment, tax, legal or accounting advice, and should not be relied upon in that regard. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies. These investments may not be suitable to the circumstances of an investor.

Global X Investments Canada Inc. (“Global X”) is a wholly-owned subsidiary of Mirae Asset Global Investments Co., Ltd. (“Mirae Asset”), the Korea-based asset management entity of Mirae Asset Financial Group. Global X is a corporation existing under the laws of Canada and is the manager, investment manager and trustee of the Global X Funds.

© 2025 Global X Investments Canada Inc. All Rights Reserved