Summary

• The Invesco Health Care Fund underperformed its benchmark during the quarter as stock selection in pharmaceuticals, biotechnology and health care equipment detracted from relative performance.
• Invesco Health Care Fund management maintains a bearish outlook for managed care, while viewing diagnostics, distributors and home health care providers as positive areas.
• Invesco believes merger and acquisition activity in biotechnology has been accelerating as hoped and provides a catalyst for biotech industry performance.
• During the quarter, the Invesco Health Care Fund's weightings in pharmaceuticals and biotechnology increased the most, while weightings in health care equipment and facilities decreased.
• Johnson & Johnson reported better-than-expected earnings and guidance, driven by growth in its oncology segment, robust adoption of cardiovascular devices and advancements in its immunology pipeline.

Key takeaways

1 The fund underperformed its benchmark

Stock selection in pharmaceuticals, biotechnology and health care equipment detracted from relative performance during the quarter.

2 The health care sector underperformed the overall US stock market