Healthcare reform and the Supreme Court: Tuning out the noise and focusing on the facts

The landmark healthcare law that was passed in 2010 — and was recently brought before the U.S. Supreme Court — has been likened to some of the most important Supreme Court cases in history. The provisions of the legislation sweep broadly through the U.S. healthcare system, with implications across a wide array of healthcare-related industries. In one way or another, millions of people could potentially feel the resulting effects.

For global healthcare investors, we believe there is a risk that such legislative and judicial action can overwhelm the news cycle, overshadowing what we think remain very positive forces at work within the healthcare sector, both domestically and around the world. Consider, for instance, the massive demand for healthcare products and services that aging populations in the United States and across the developed world will need in the coming decades. At the same time, middle class populations in developing countries are expanding quickly, and we believe this growth will create big appetites for modern medicine.

In our opinion, no matter how sweeping the changes the Supreme Court could ultimately make to the Affordable Care Act (often referred to as “Obamacare”), we remain optimistic about the underlying, long-term positive fundamentals within the sector.

Age distribution in the United States

Chart is for comparative purposes only.

The fastest growing age group in the U.S. is also the oldest. Measured from 1995 levels, people aged 85 and older will double in number by 2030 and grow fivefold by 2050.

By 2050, nearly 90 million people will be 65 years of age or older, representing 20% of the population.

In 2011, the first members of the Baby Boom Generation reached their 65th birthdays. In this chart, their entry into the 65-and-above age group is a big factor in the upward slope of the population curves.

(Data: U.S. Census Bureau, Population Division, April 2012)

Did you know?

A growing middle class will bolster demand for healthcare services

  • As middle classes swell globally, they are expected by many economists to naturally focus a greater portion of income on healthcare, taking advantage of treatments and therapies that were once out of their reach.
  • Like never before, middle classes are expected to subscribe to the benefits of state-of-the-art medicine, generating demand across a variety of healthcare sectors.

Delaware Healthcare Fund provides investors with a professionally managed allocation to the dynamic healthcare sector. Visit the fund center to access the information on the Fund's performance, fees and expenses, holdings, and management team.

Your financial advisor can help you determine whether a healthcare equity allocation could complement your overall investment mix and would be suitable for your investment goals.

At Delaware Investments, we take a disciplined approach to investing in the healthcare sector. We seek to invest in organizations that we feel show high potential to deliver competitive performance, independent of the inevitable daily ups and downs of the broad equity market. Our conservative, bottom-up (stock by stock) approach to stock selection is an elemental part of our investment strategy.

The views expressed represent the Manager's assessment of the market environment as of April 2012, and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice. Views are subject to change without notice and may not reflect the manager's current views.

Carefully consider the Funds' investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Funds' prospectuses and their summary prospectuses, which may be obtained by visiting or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.


Investing involves risk, including the possible loss of principal.

Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors. Technology companies may be subject to severe competition and product obsolescence.

Healthcare companies are subject to extensive government regulation and their profitability can be affected by restrictions on government reimbursement for medical expenses, rising costs of medical products and services, pricing pressure, and malpractice or other litigation.

International investments entail risks not ordinarily associated with US investments including fluctuation in currency values, differences in accounting principles, or economic or political instability in other nations.

Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility and lower trading volume.

Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.

Delaware Healthcare Fund is "non-diversified" as defined by the 1940 Act.

“Non-diversified” funds may allocate more of their net assets to investments in single securities than “diversified” funds. Resulting adverse effects may subject these funds to greater risks and volatility.