New highs? Liontrust duo tip drug majors to be next big winners

After a decade of scant gains, some investors are now piling into pharmaceuticals as a combination of high yields and attractive valuations draw managers in, but is this the start of a decade-long move up?

Even in the context of their status as perennial cautious plays, drug companies have produced little in the way of capital growth over the past decade, particularly compared with some defensive peers. Take the tobacco sector, for example: British American Tobacco produced capital growth of 498.5% over the last 10 years, while Imperial Tobacco returned 126.5%. By contrast, pharmaceuticals have been hampered by concerns over management, looming patent cliffs and uncertain drug pipelines. Sector giants GlaxoSmithKline (GSK) and AstraZeneca have produced capital growth of just 24% and ...