NEW YORK, Jan 8 Reuters The U.S. healthcare sector is showing signs of life after lagging in 2023 as investors bet cheap valuations will offset a tendency to underperform during presidential election years.

The SP 500 healthcare sector has climbed about 6 since the start of December, doubling the gain of the broader index during that period. Its performance during 2023 overall was far less impressive, as it rose just 0.3 compared to the SP 500s 24 jump.

Healthcare, which has a roughly 13 weight in the SP 500, was one of the areas left behind last year as investors flocked to the narrow group of massive tech and growth stocks that propelled indexes higher.

The rise of new obesity treatments sparked worries that there would be less need for medical treatments aimed at weightrelated health conditions at the same time demand for COVID19 products waned.

The sector39;s lackluster showing has made it an attractive target for investors looking for undervalued areas of the market. The healthcare sector trades at 17.9 times forward earnings estimates versus a PE ratio of 19.7 for the SP 500, a discount of 9. Historically, healthcare has traded at a 4 premium to the broader index, data from LSEG Datastream showed.

Investors are starting to look out for those sectors that didnt work in 2023, and healthcare fits that bill, said Art Hogan, chief market strategist at B. Riley Wealth, who is recommending investors overweight the healthcare sector.

Some investors are also betting…