Like the broader equity market, health care stocks experienced bouts of volatility during the third quarter. But attractive valuations, continued innovation and an uptick in merger and acquisitions could help lift the sector, says Portfolio Manager Andy Acker.

Key Takeaways

  • Like the broader equity market, health care stocks experienced volatility during the third quarter, though for sector-specific reasons.
  • In particular, a sharp pullback in small- and mid-cap biotech stocks that started in February continued through mid-August.
  • However, low valuations and continued innovation have led to an uptick in mergers and acquisitions, which could help support the sector. In addition, other headwinds could prove transitory.