Ivo Višić, Senior Investment Office, CIO Office Europe and Matt Barry, Investment Strategist, Americas

Mar. 26, 2019

Digitalization is driving massive change in the medical device sector which is still considered to be the main route to investing into medical technology (medtech). At the same time demographics put increasing strain on healthcare provision. The hope is that technology will allow cost-efficient delivery of high-quality, client-centred care to aging populations around the world.

 

Executive summary

 

Medical technology (medtech) is mainly investable in via the medical devices sector which has global revenues of around USD370bn per year which corresponds to ~5% of the total health care market worth USD7tr.

 

The U.S. is currently both the biggest market for medical devices (43%) and the domicile of the majority of the sector’s big players, but demographics are helping to boost the importance of emerging markets.

 

At the same time, digitalization is encouraging a shift in the industry’s focus, with individual devices complemented by a more holistic approach to care.

 

This is likely to attract tech firms and other digital entrants: existing firms in the sector may need to collaborate to access a range of skills.

 

At present, U.S. medical device firms’ current focus seems however to be on short-term growth, with medtech-related M&A currently at low levels.

 

These trends could benefit some firms in the medium term but may also create some risks, given strong valuations and marked outperformance relative to the broader market over the past two years.

 

Over the longer term, however, we see significant opportunities as the changes wrought by digitalization and demographics encourage growth and the provision of new high-quality services.

 

To download a PDF of the full report, please click here.

 

In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk. CIO Office, Deutsche Bank Wealth Management, Deutsche Bank AG - Email: WM.CIO-Office@db.com.

You may also be interested in

Theme 1 – Policy pressures need prudent response

Economic slowdown worries have encouraged central banks to loosen monetary policy again, but many factors that are hurting growth are non-monetary in nature. Even though the effectiveness of monetary policy is nearing its limits, and calls for fiscal stimulus will be more vocal, we don’t anticipate a massive fiscal boost. Political developments will also continue to have an impact on markets.

  • Dec. 19, 2019
  • |
  • 1 min read

Theme 2 – Living with a low yields world

With a continuing policy reliance on monetary “magic”, current financial repression in the form of negative (real) bond yields will continue for some time. Many central banks now own high shares of their countries’ overall debt (in the case of the Bank of Japan, 45%) and winding these holdings down will take time – if it happens at all.

  • Dec. 19, 2019
  • |
  • 1 min read

Theme 6 – Tech meets ESG

Our long-term investment themes, now in their fourth year, target structural, long-term changes in the economic environment. They include Cybersecurity, Millennials and Healthcare (launched in 2017); Infrastructure, Smart Mobility and Artificial Intelligence (launched in 2018); ESG (environmental, social and governance) Investing and Enhanced Infrastructure (launched in 2019). For 2020, we launch two new long-term themes: 5G Fast Forward and Resource Stewardship.

  • Dec. 19, 2019
  • |
  • 1 min read


The content and materials on this website may be considered Marketing Material. The market price of an investment can fall as well as rise and you might not get back the amount originally invested.  The products, services, information and/or materials contained within these web pages may not be available for residents of certain jurisdictions. Please consider the sales restrictions relating to the products or services in question for further information. Deutsche Bank does not give tax or legal advice; prospective investors should seek advice from their own tax advisers and/or lawyers before entering into any investment.