Investing in ASX healthcare shares

What are ASX healthcare shares?

The ASX healthcare sector covers everything from biotech and pharmaceutical companies to owners and operators of hospitals and other medical facilities to designers and manufacturers of medical devices.

While our awareness of the healthcare sector was sharply elevated during the COVID-19 pandemic, the sector has since faced a new set of challenges and opportunities in the post-pandemic environment.

ASX healthcare shares include a diverse range of companies, some of which are among the largest listed on the exchange by market capitalisation. For example, leading biotechnology company CSL Limited (ASX: CSL) is the eighth (formerly third) largest company on the ASX, with a market cap of over $60 billion as of early 2026.

Why invest in healthcare shares?

Healthcare can be an exciting sector of the market to be exposed to because many companies operating in this space are at the cutting edge of science and research. 

Many investors would likely consider junior biotech companies high-risk, high-reward shares. They might only be in the research and development phase, with their drugs or therapeutics yet to pass the whole gamut of efficacy tests and clinical trials. While this makes it possible that they will fail, they might make a medical breakthrough and upend their industry.

However, not all healthcare shares are speculative. More mature companies are often considered great defensive shares, with profits tending to hold up even when the broader economy is in strife, since healthcare spending is one of the last things consumers cut back on.

That said, the sector's recent performance is a reminder that even mature names carry risk: in 2025, only five of the 24 healthcare stocks in the ASX 300 outperformed the index, weighed down by regulatory risks, funding pressures, and currency headwinds.

This is because spending on our personal healthcare is one of the last things we tend to cut back on when times are tough. In turn, this ensures demand for certain healthcare products and services – particularly hospitals, drugs, and medical devices – remains relatively stable, even in an economic downturn.

Top healthcare stocks on the ASX

The ASX healthcare sector comprises companies operating in two key industry groups: healthcare equipment and services, and pharmaceuticals, biotech and life sciences.

Those in the healthcare equipment and services industry might produce medical devices like hearing aids or imaging equipment for hospitals. They also provide services like specialist aged care.

Pharmaceuticals, biotech and life sciences companies develop and produce treatments for serious diseases, injuries, and other medical conditions. Some of these companies may be developing entirely new treatments – often using cutting-edge medical technologies – and so it can be a very exciting industry group to follow. 

Here we profile three top healthcare shares listed in order of market capitalisation from highest to lowest.

CSL Limited

Since it was founded more than 100 years ago, CSL Limited (ASX: CSL) has grown into a leading global biotech company focused on vaccines, rare diseases, and iron deficiency, with plasma therapies at its core. It remains one of the ASX's largest blue-chip shares, generating over US$10 billion in annual revenue and paying dividends.

The share price has fallen sharply from 2025 highs due to weaker results, restructuring, and broader sector pressures. However, brokers such as UBS remain optimistic, highlighting strong early uptake of its Andembry therapy and potential market share gains in hereditary angioedema.

Despite recent headwinds, CSL's core business is supported by growing demand for plasma therapies in a concentrated market. Many analysts believe the sell-off is overdone and see meaningful upside, supported by CSL's scale, innovation, and long-term growth pipeline.

ResMed CDI

Based out of San Diego, ResMed (ASX: RMD) is a global leader in devices and digital platforms for treating sleep apnoea and other respiratory conditions. Its ecosystem combines medical devices, software, and cloud-connected data, with operations spanning more than 140 countries.

Its core products include CPAP machines and accessories, which help patients breathe more easily during sleep. Recent results (Q2 FY26) showed revenue rising 11% to $1.42 billion and net income increasing 14%, highlighting strong demand and growth in its digital health platform.

Founded in Australia in 1989, ResMed has a large long-term opportunity, with over one billion people affected by sleep apnoea globally and many still undiagnosed. While structural tailwinds support growth, some analysts believe recent share price gains may already reflect much of this optimism.

Sigma Healthcare

Sigma Healthcare (ASX: SIG) is a major player in Australia's healthcare sector, benefiting from tailwinds such as an ageing and growing population. The company's key asset is Chemist Warehouse, the country's leading pharmacy brand, which drives the majority of earnings through a wide range of essential health and wellness products.

The business is delivering strong growth across its network. Chemist Warehouse is generating mid-teen same-store sales growth, while expanding its footprint across Australia, New Zealand, and Ireland. In HY26, Sigma reported revenue growth of 14.9% to $5.5 billion, EBIT growth of 18.7% to $582.9 million, and net profit growth of 19.2% to $392 million — with each profit line growing faster than the last, supported by scale benefits and rising sales of owned and exclusive products.

Looking ahead, Sigma appears well positioned to continue expanding, with plans to open new stores and accelerate international growth, where sales are already rising faster than domestically. While the stock trades at a relatively high valuation (around 40–45x FY26 earnings), its strong momentum, growing global network, and improving margins suggest it could deliver solid long-term growth.

What might the future hold for the healthcare sector?

Changing population demographics provide both challenges and tailwinds for the healthcare sector. 

Many countries, including Australia, have ageing populations with changing and increasing healthcare needs. There might be greater demand for aged care services, occupational and physical therapy, and drugs and other therapeutics that treat dementia, Alzheimer's and other age-related conditions.

Not only that, but advancements in medicine have made it possible for many people to live much longer with medical conditions. These people will require regular and ongoing care and treatment, increasing the demands placed on medical facilities.

The COVID-19 pandemic has also made healthcare an issue of national security. This may motivate governments to invest more in the sector through funding grants and other initiatives, which could provide further tailwinds for the sector.

What are the benefits of investing in ASX healthcare shares?

Different risk characteristics: Because the healthcare sector is so diverse, you can achieve a variety of investing goals by buying healthcare stocks. You can target high-growth or defensive shares depending on the company you invest in.

Proven history of success: In the five years between February 2018 and February 2023, the S&P/ASX 200 Health Care Index (ASX: XHJ) has gone up by more than 60% versus the broader S&P/ASX 200 Index (ASX: XJO), which has only increased by about 20% over the same period.

Investing in healthcare is ethical: When investing in healthcare shares, you're investing in companies that improve people's lives. This can be very important in an era when people are concerned about investing their money ethically. 

And the cons?

Barriers to entry are high: It costs a lot to develop, test, and market new healthcare products. This can make it challenging for new companies to succeed. Because junior companies don't have the same resources as their more established rivals, it can be tough to compete.

Risk of obsolescence: New treatments can quickly make older ones obsolete. New drugs, technologies, and therapeutics can sometimes come along that entirely replace older remedies.

Are ASX healthcare shares a good investment?

There are many benefits to investing in ASX healthcare stocks, but there are also risks as well. Whether ASX healthcare shares would make a good investment depends entirely on your investment objectives and risk appetite. 

But remember, healthcare is a diverse sector, with many different shares to choose from, each with their own risk and return characteristics.

If you wish to gain exposure to a broad basket of healthcare shares, you can purchase units in an exchange-traded fund (ETF). An ETF trades on the ASX just like ordinary shares but can expose you to a diversified portfolio of companies.

For example, the iShares Global Healthcare ETF (ASX: IXJ) invests in some of the biggest healthcare companies in the world and seeks to replicate the returns of the S&P Global 1200 Healthcare Sector Index (INDEXSP: SPG1200-35) before fees and taxes.

If you still need to decide whether healthcare stocks are right for you, seek the advice of a financial professional, like a broker or financial advisor, before making an investment decision.