OREANDA-NEWS. August 21, 2015. The SGX Healthcare Index has generated a 15.5% gain in the 2015 year thus far. The SGX Healthcare Index is an indicative index with component stocks that report at least half their revenues from healthcare in the last financial year and REITs with investments in healthcare facilities. The weightings of component stocks are capped at a maximum of 10% at each semi-annual rebalance so that it is better diversified across a range of companies.

The year to date gain of the SGX Healthcare Index is similar to the MSCI Daily TR World Net Health Care USD which gained 12.8%.  The MSCI Daily TR World Net Health Care USD is highly correlated with the MSCI World Healthcare Index. The difference with the two indices is that the MSCI Daily TR World Net Health Care USD is calculated on a dividend, total return-basis, like the indicative SGX Healthcare Index.

A longer term performance comparison of the two indices is illustrated in the table below revealing a similar trend over the past  four years. The absence of major swings and cyclicality of the two indices in the previous few years means the indices provided investors with a defensive performance. Please note it is the diversified indices themselves that have generated the defensive past performance, as some constituents in both indices have seen significant share price swings during the period.

Source: SGX (data as of 19 August 2015)

Currently the SGX Healthcare Index is made up of 29 component stocks. Due to the relative market capitalisations of the 29 securities, the six largest constituents currently account for approximately 60% of the index weight. These six stocks are IHH Healthcare Berhad, Raffles Medical Group, Haw Par Corporation, Parkway Life Real Estate Investment Trust, Tianjin Zhongxin Pharmaceutical Group Corporation and Biosensors International Group. Together these stocks have averaged a 21.3% total return in the year thus far.

Among the 29 stocks, the five best performers in the year to date were Riverstone Holdings, Q & M Dental Group (Singapore), Tianjin Zhongxin Pharmaceutical Group Corporation, Cordlife Group and Biosensors International Group. Together those five stocks averaged a 54% gain, while the five least performing stocks of the Index averaged a 56% decline in the year thus far.

Singapore O&G was added to the Index at the last rebalance and has gained 28% from its first day close and 176% from its initial offer price. IX Biopharma has listed since last the rebalance and is currently trading 52% lower from its first day close and 41% lower than its initial offer price.

The 29 stocks that make up the SGX Healthcare Index trade at an average P/E ratio of 20.6 and maintain an average indicative dividend yield of 2.9%.  The comparative P/E ratio of the MSCI World Healthcare Index is 24.5. The table below details the 29 stocks that make up the SGX Healthcare Index. Please note that by clicking on a name it will take you directly to its page on SGX StockFacts.