Where Evidence Meets Opportunity | March 2026

Healthcare Investing in a More Discerning Market Environment

Written by: David Mandelbaum, Portfolio Manager

Key Takeaways This Month

• Markets shifted into a more fragile, supply-driven regime in March, with geopolitical escalation driving energy shock risk, rising inflation concerns, and broader cross-asset volatility.
• Traditional diversification failed to provide its usual protection, as equities, bonds, gold, and other defensive tools all struggled simultaneously.
• Healthcare underperformed during the broad-based selloff, not because fundamentals deteriorated, but because the sector was swept up in large-scale de-grossing and liquidity-driven pressures affecting the broader market.
• A late-month rally emerged on optimism that the conflict could de-escalate, though whether that proves durable or another false start remains uncertain.
• We remain positioned in areas with strong non-cyclical, durable demand dynamics and in high innovation-driven growth franchises, where we continue to see the most attractive combination of resilience and long-term return potential. 

Market Review: From Headline Shock to More Persistent Fragility 

March marked a more consequential turn in the macro backdrop. What initially appeared to be a geopolitical shock increasingly took on the characteristics of a broader, more persistent supply-side event, with direct implications for energy, inflation, and market structure.

As the conflict moved deeper into energy infrastructure and key shipping routes, markets were forced to confront the possibility that this was no longer just a confidence shock, but something with more durable economic consequences. Oil prices rose sharply, inflation expectations moved higher, and the path back to a benign disinflationary environment became less clear. At the same time, early signs of strain in private credit reinforced concerns around financial system resilience, particularly in less transparent corners of the market where liquidity can prove scarce precisely when it is most needed.

Taken together, these forces pushed the market away from the cleaner soft-landing framework that had shaped expectations earlier in the year and toward something more fragile: slower growth, more persistent inflation risk, and less confidence that central bank easing would provide timely support.

Just as important as the equity selloff itself was the behavior of defensive assets. In prior periods of risk aversion, investors could typically rely on some combination of government bonds, gold, or volatility-linked strategies to provide ballast. This time, those tools were far less effective. Bonds sold off alongside equities as inflation concerns rose. Gold, after a strong run, failed to deliver consistent protection. Even more explicit downside hedges struggled to function as expected. The result was a broad-based, cross-asset drawdown and a reminder that diversification can become less reliable when markets are dealing with supply shocks rather than demand shocks.

That dynamic matters, because it helps explain one of the more unusual and frustrating features of the month: Healthcare’s lack of defense.

Healthcare: Stable Fundamentals, Weak Performance

Historically, Healthcare has played an important defensive role during periods of macro stress. The sector benefits from inelastic demand, recurring revenue streams, and relatively limited direct exposure to economic cyclicality. In most risk-off environments, those characteristics should support relative resilience.

That was not the case in March.

Instead, Healthcare underperformed during the broad-based selloff, despite largely stable underlying fundamentals. In our view, this was not a sign of deterioration in the earnings power of the sector, but rather a reflection of the same forces affecting broader markets: rising correlations, broad-based de-grossing, and the use of Healthcare as a source of liquidity.

In a market where even traditional hedges were failing to provide protection, defensive sectors were not insulated. They were simply sold alongside everything else.

This helps reconcile what might otherwise appear contradictory: Healthcare fundamentals remained largely intact, yet the sector still performed poorly. The disconnect was driven not by industry or business-level change, but by market mechanics.

Encouragingly, sentiment improved meaningfully late in the month as optimism rose that the conflict could de-escalate and that the worst-case energy scenario might be avoided. That drove a sharp rally into quarter-end. Whether this proves to be the beginning of a more sustainable recovery or simply another temporary reprieve remains to be seen. Much will depend on how events unfold from here. Still, the rally served as a reminder of how quickly markets can move once fear begins to ease.

More broadly, once macro conditions stabilize and correlations begin to normalize, we believe the environment should become considerably more supportive for Healthcare. In that setting, the sector’s traditional strengths, which include durable demand, robust defensive cash flow characteristics, and multiple avenues for innovation-driven growth, should reassert themselves.

We continue to believe that the most attractive opportunities lie in areas where resilience and secular growth co-exist: businesses with strong non-cyclical revenue streams, visible long-duration growth drivers, and stable to expanding margin profiles supported by scale, mix, and operating leverage, with comparatively low policy sensitivity.

Sector Developments: Innovation, Capital Deployment, and Mixed Signals from ACC

March also produced several meaningful sector-specific developments.

This year’s American College of Cardiology (ACC) meeting delivered a mixed message. Within Medical Technology, new data raised incremental questions for certain structural heart segments, particularly around the ultimate scope of some high expectation addressable opportunities. While not thesis-breaking for the broader space, the conference introduced enough ambiguity to temper some of the more straightforward bullish assumptions around selected procedural growth categories.

By contrast, Biopharma saw encouraging data in cardiovascular disease, including within the PCSK9 category. That reinforced the continuing depth of innovation in large therapeutic areas where scientific progress can still create meaningful commercial opportunity, even in more mature categories.

Strategic capital deployment remained another important theme. Deal activity stayed elevated through month-end, including notable transactions announced by both Biogen and Eli Lilly. This continues to reinforce our view that well-capitalized large-cap companies will remain aggressive in using their balance sheets to supplement pipelines, extend growth visibility, and address future revenue gaps.

We view Lilly’s recently announced deal as particularly compelling. The company believes the transaction could create a platform for expansion into the large and underpenetrated markets of memory and cognition, areas that may ultimately share some of the same consumer-oriented adoption characteristics that have helped define the GLP-1 category. As we write this, Lilly also received FDA approval for its oral GLP-1, setting the stage for the launch of what could become its next major growth product.

Taken together, those developments further strengthen our view that select large-cap Biopharma franchises remain uniquely positioned at the intersection of innovation, capital deployment, and long-duration growth.

Policy and Near-Term Catalysts

Policy was somewhat less central to March performance than macro and market structure, but it remains an important part of the backdrop.

The next major policy milestone is the Final Medicare Advantage rate, expected shortly. Recent feedback from Washington analysts suggests the potential for modest improvement relative to the initial negative proposal. While that would not eliminate policy uncertainty for Managed Care, it could help reduce some of the worst-case assumptions currently reflected in valuations. We intend to revisit our positioning in the space once greater clarity is available.

Beyond policy, the next few weeks should bring a more meaningful test of sector fundamentals. Upcoming earnings will provide the next validation for investment theses across Healthcare, offering clearer visibility into demand trends, margin progression, exposure to macro factors, and capital allocation priorities. We also anticipate several important clinical readouts in the coming months, which could further shape the opportunity set across Biopharma and influence relative positioning within the sector.

Portfolio Positioning

Against that backdrop, we have used the recent broad-based selloff constructively.

During the quarter-end dislocation, we were active in harvesting tax losses, upgrading overall portfolio quality, and repositioning capital toward businesses with stronger balance sheets, more durable demand profiles, and clearer long-term growth drivers. At the same time, we continued to reduce exposure to areas with elevated policy sensitivity or greater structural uncertainty.

Today, the portfolio remains centered on two broad pillars. The first is exposure to businesses with strong non-cyclical, durable demand dynamics, particularly where scale, operational complexity, or embedded positioning support resilient earnings across cycles. The second is exposure to high innovation-driven growth franchises, especially in Biopharma, Life Science Tools, and MedTech, where we continue to see compelling long-term upside supported by innovation, capital deployment, and eventual growth acceleration as end markets improve.

Our Biopharma exposure remains anchored in franchises where diminishing policy risk, strong cash flow characteristics, and visible extended growth drivers create attractive asymmetric return profiles.

We also view Life Science Tools as an attractive medium-term opportunity. Current softness in certain end markets has obscured what we believe is a favorable setup for future growth acceleration as funding conditions normalize and biopharma activity improves.

Medical Technology remains another important complementary focus area within the portfolio, though we continue to differentiate carefully within the space following recent conference developments.

Within Healthcare Services, we favor infrastructure-oriented businesses with limited direct policy exposure, where scale and operational complexity support durable demand and resilient earnings profiles.

Overall, our objective has been to strengthen the portfolio during a period when prices have been driven more by flows than by fundamentals, so that when conditions normalize the portfolio will be better positioned to participate in a recovery grounded in earnings durability and long-term growth.

Closing Thoughts

March was a reminder that markets can change character quickly when geopolitical escalation, inflation risk, and financial fragility begin to reinforce one another. In that type of environment, even sectors with stable fundamentals can struggle in the short term if de-grossing and correlation-driven selling overwhelm business-level differentiation. That, in our view, is what happened to Healthcare this month.

Even so, the underlying case for the sector remains intact. As macro conditions stabilize and market attention returns to fundamentals, we believe Healthcare should again benefit from the combination of defensive secular demand characteristics, attractive valuations, improving policy clarity in many areas, and compelling innovation-driven growth.

We remain focused on using periods of volatility to strengthen portfolio quality, sharpen exposure, and position the strategy for attractive risk-adjusted returns as conditions normalize. Having used the recent dislocation constructively, we are confident in the portfolio’s positioning as we move through the remainder of the year.

We look forward to updating you again next month.

.

If you’d like to discuss how a more selective, evidence-driven approach may fit within your broader portfolio, we invite a confidential conversation with our investment team.

Disclaimers

David Mandelbaum is solely an investment advisor representative and a lead portfolio manager of OnePoint BFG Wealth Partners, a registered investment adviser. Investment advisory and financial planning services offered through Bleakley Financial Group LLC, an SEC registered investment adviser, doing business as OnePoint BFG Wealth Partners. 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The market and economic data is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The information in this report has been prepared from data believed to be reliable, but no representation is being made as to its accuracy and completeness.

Nothing in this material should be construed as investment advice offered by OnePoint BFG Wealth Partners or David Mandelbaum. This market commentary is for informational purposes only and is not meant to constitute a recommendation of any particular investment, security, portfolio of securities, transaction or investment strategy. No chart, graph, or other figure provided should be used to determine which securities to buy, sell, or hold. No representation is made concerning the appropriateness of any particular investment, security, portfolio of securities, transaction or investment strategy. You should speak with your own financial professional before making any investment decisions.

Past performance is not indicative of future results. Neither OnePoint BFG Wealth Partners nor David Mandelbaum guarantees any specific outcome or profit. These disclosures cannot and do not list every conceivable factor that may affect the results of any investment or investment strategy. Risks will arise, and an investor must be willing and able to accept those risks, including the loss of principal.

Certain statements contained herein are statements of future expectations and other forward-looking statements that are based on opinions and assumptions that involve known and unknown risks and uncertainties that would cause actual results, performance or events to differ materially from those expressed or implied in such statements.

 OP 26-4004