Paul MacDonald

The health care sector has under performed over the past two years. There has been a re-acceleration of growth across the breadth of the market. The health care sector started to participate in June through early fall. However headlines caused it to lag but the drivers are long term dynamics such as tech innovation. With the new U.S. government the biggest risk over the next 4 years is policy risk. Trade policy risk is elevated.
Many policies in health care under the previous administration have already been implemented because of bi-partisan support. Perhaps the vaccine businesses could be affected by RFK but the market has already worked this in as a risk

There is a lot going on with the class of drug involving diabetes and weight loss. The potential of PLP1 drugs is huge and could become a $100 billion market so there is lots of competition.The efficacy of the new class is superior and they are very excited over some positive results. He doesn't own NVO but loves the space and instead of adding to NVO as the caller was wondering about, he would buy Eli Lilly as a complement to it in that space. Their new drug is much the same as Ozempic but is in an oral form rather than injection. This could be a game changer with 60 different ongoing trials. Eli Lilly is the first to get it approved for obesity and phase three results will be coming out of Japan. Diversity is essential.

He doesn't know it that well and already has exposure to the medical devices sector. He holds Medtronic, Boston Scientific, Intuitive Surgical which are all performing well. He feels that GEHC has relatively low growth.

It is a large distributer of drugs which is a volume based business and has low margins. It is not expensive.

The question was on buying the stock, LLY, or buying the single stock ETF for Eli Lilly which is LLYH. High income and single stock ETF's are somewhat new to the Canadian marketplace. This type of ETF is a way for Canadians to own a U.S. stock listed on the TSX. With LLYH you get exposure to LLY on a Canadian exchange as well as monthly cash flow from options they write on it. So basically it is an individual stock with an option strategy. Also the ETF is a lower priced Canadian product with tax implications. LLAT is the same thing but with more leverage. You give up some upside on the stock but get a big cash flow.

It holds 30 utility companies in North America and Western Europe and is a passively managed portfolio. Utilities tend to be defensive and should be diversified across geographic areas to reduce risk.

It is a great company, well run, and a core holding. They execute very well on the orthopedic side and is one of the leaders. Five years ago they launched the robotic assisted surgery component which is performing very well. He sees it as a double digit compounder.

It is one of the more diversified lab equipment manufacturers. He really likes the medical part and sees growth there. Some of their components have slower growth.

It is for profit Blue Cross and Blue Shield Insurance and orchestrates insurance across various drug companies as well as administrates health care for the government. There are a couple of headwinds and needs the fundamentals to validate it. He likes the value.

Diversity is good in the bio pharma space. It is a fully diversified large cap and he would have it as a core holding.

It has had the same distribution for the past 10 years and is one of the top performers in the market. It has equity risk with some volatility but pays a consistent monthly distribution. Holds 20 large cap companies with maybe only a couple of changes per year.

The question was investing in U.S. or Canadian stocks. Canadians can buy Canadian ETF's that have exposure to the U. S. in U.S. dollars. The Canadian market is about 1% health care so you should go the U.S. market for that space.

It has been a turn-around for a long time but hasn't performed well. It lost a few key contracts in the past two years. He prefers United Health.

It has over paid for some M&A. It is a deep value play but needs a catalyst. It has had some management change but recovery is not part of their investment style. They sold about a year and a half ago.

It is the front runner in robotic surgeries and its new launching is doing well. The market should double in the next period of time and it is a great long term investment. They have premiums on their option strategies.