The Furman Selz/MODERN HEALTHCARE composite index of healthcare stocks has been recalculated to better track the movement of the Standard & Poor's 500 stock index.
Through an effective 3-for-2 stock split on March 1, the composite healthcare index was rebased to a value of 628.4, more closely tracking the value of the broad-based S&P 500, which was 644.4 on that date. In recent years, healthcare stocks have outperformed the S&P 500, creating a large gap between the two indexes.
When the healthcare composite index was created, it was set to a value approximating the S&P 500 as of Dec. 19, 1989. At that time, the value of the S&P 500 was 350, and the healthcare index was set at 353.4. Since the base year, the healthcare portfolio's value has increased 167%, while the S&P 500 has risen only 82%.
By rebasing the composite healthcare index to the S&P 500, "you can actually see some of the peaks and valleys better," said Keven Shanahan, a Furman Selz analyst.
The accompanying chart reflects the adjusted values. Updated figures will be reported monthly in MODERN HEALTHCARE.