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HealthLeaders: COVID-19 Sell-Off Impacted Healthcare Org Portfolios

December 15, 2020

NEPC's 2020 Healthcare Operating Survey was featured in a HealthLeaders article

The survey also found that healthcare organization portfolio risk declined following the volatility of Q1 2020.

The sell-off earlier this year that was caused by the COVID-19 pandemic materially impacted the portfolios of healthcare organizations, according to an NEPC LLC study released Tuesday morning.

The median one-year return for healthcare investments at the end of 2019 was 15.5%, while the median five-year return was 5.4%. By the end of March, the median one-year return was negative 5.4% and the five-year return was only 2.2%.
NEPC noted that lower-rated healthcare systems protected capital "to a greater degree" than their higher-rated counterparts. Still, the research indicated that larger, higher-rated systems increased their risk profiles.

Broad asset allocation:

  • Equity: 40%
  • Fixed income: 31%
  • Alternatives: 22%
  • Cash 2%

The survey also found that healthcare organization portfolio risk declined following the volatility of Q1 2020.

"Key considerations for healthcare systems going forward will be maintaining portfolio diversification and liquidity management, especially as systems handle COVID-19 vaccine deployment," Kevin Novak, senior consultant for NEPC's healthcare practice group, said in a statement. "With market volatility likely to continue, these elements will become crucial in managing enterprise risk."

Topics: Press, Press Coverage

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