Expert explains why healthcare is a top-performing sector

• Healthcare sector (XLV) has become a top-performing sector since May, after a slow start to the year.
• AI is identified as a major tailwind for healthcare, helping to shorten drug trials and improve economic feasibility.
• Significant M&A activity in healthcare and biotech (over $236 billion announced) is driving growth, as pharmaceutical companies fill pipelines due to patent cliffs.
• Japan is favored due to corporate governance reforms and export growth, while emerging markets offer an expanding consumer base and semiconductor opportunities.

The discussion focuses on the healthcare sector's recent strong performance, with the SPDR Healthcare Select ETF (XLV) hitting an all-time high. CIO Eric Sterner attributes this to increased M&A activity and the leveraging of AI to shorten drug trials. He also highlights Japan and emerging markets as attractive investment opportunities due to corporate governance reforms and expanding consumer bases, respectively.