Healthcare has been the best-performing sector in the U.S. markets over the past year with a 25.3% return, a number that doesn’t even include dividends. Add in payouts and you come out with a one-year total return closer to 30%. So what has set healthcare apart?

Love it or hate it, Obamacare has definitely given the U.S. healthcare sector a leg up. The percentage of uninsured American adults has fallen from 14.6% at the beginning of 2008 to 11.9% in the first quarter of 2015. By the second quarter of this year, it had fallen even further, to just 11.4%. That’s largely thanks to the greater availability of affordable health coverage and the expansion of Medicaid—health insurance provided to low-income Americans—in several states.

That Medicaid expansion has been particularly beneficial for our holding HCP over the past couple of years and has helped fund its 5.9% yield, though we’ve only held it in our Conservative Portfolio since April.

A real estate investment trust that specializes in healthcare-related properties, 38% of its portfolio is devoted to senior housing, with another 24% in post-acute and skilled nursing facilities. Medicaid is often the main method of financing extended care for the elderly, particularly those of limited means.

Many of HCP’s properties are located in states that have participated in the Medicaid expansion, deepening the pool of available patients and helping boost the occupancy rates at HCP-owned facilities. That’s a major reason why those two segments saw some of the strongest net income growth in 2013 and 2014.

HCP (NYSE: HCP) has run into some recent difficulty with its largest tenant, HCR ManorCare, and provided it with about $68 million in annual rent relief. That dinged its second-quarter results, though funds from operations (FFO)—a key operating metric for REITs—still rose year-over-year by 5%, to $0.79.

It also completed about $1.4 billion worth of investments in the quarter, bolstering its future growth prospects. As a result, management actually increased its full-year FFO and EPS guidance range to between $1.97 and $2.03, and $0.75 and $0.81, respectively.

Continuing to grow despite the recent bump in the road and increasing its dividend for the 30th consecutive year, HCP remains a Buy up to $44.

While there are clearly some secular tailwinds benefiting the sector here in America, the case has been and will remain much the same in the rest of the world. Global consultancy Deloitte estimates that global healthcare spending rose by 2.8% in 2013 to a total of $7.2 trillion, equating to roughly 10.6% of global gross domestic product that year. It also believes that spending will grow by an average of 5.2% a year between last year and 2018, reaching $9.3 trillion, thanks to the growing health needs of aging populations and the increasing prevalence of chronic lifestyle-related illnesses, such as diabetes, heart disease and some forms of cancer.

That growing demand for health care has been a boon for Novartis, which currently yields 2.6%. The company benefits from an incredibly diverse portfolio of products ranging from branded drugs and cancer treatments to eye care and consumer products. It has long shown it has the ability to launch blockbuster drugs with more than $1 billion in annual sales, with products like its cancer drug Tasigna and multiple sclerosis treatment Gilenya.

In its second quarter, pharmaceutical sales grew 6% thanks to new product launches, such as its recently approved heart failure treatment Entresto, despite pressure from generic competitors. Its generic drugs also posted strong sales growth of 11% year-over-year, an area Novartis (NYSE: NVS) has only relatively recently given a strong focus. Still, both generics and branded pharmaceuticals are a major reason why the company’s shares have produced a total return of nearly 23% over the trailing year and appreciated by more than 6% since it was added to our portfolio.

Shares of GlaxoSmithKline haven’t fared quite so well over the past year, despite their 5.6% yield, being essentially flat on a total-return basis.

The company’s earnings have been waning recently, thanks to increased competition for some of its top-selling drugs, such as respiratory treatment Advair. However, it has been posting solid gains on drugs it has developed to treat HIV, the cause of AIDS, and it has an increasingly impressive group of vaccines. In fact, it recently acquired the vaccine operations of Novartis and back in July received approval from European regulators for the world’s first malaria vaccine.

According to data from the World Health Organization, more than 200 million people were stricken with malaria in 2013 and nearly 600,000 died from the disease. Until now, malaria prevention has focused mainly on mosquito eradication, a tall order in the difficult-to-reach areas where the disease is most prevalent.

The new vaccine isn’t likely to have a major impact on GlaxoSmithKline’s (NYSE: GSK) bottom line, since it has pledged to sell the drug virtually at cost, building in just a 5% profit margin. It is, however, an excellent example of the innovative work the company is doing and it has more than 40 promising potential new drugs in mid- to late-stage trials.

Our final healthcare holding, PDL BioPharma, has had a rough year to say the least, losing nearly a third of its value.

PDL owns a portfolio of patents used for making humanized antibodies, a key component in the development and manufacture of many drugs. PDL (NSDQ: PDLI) collects royalties when its patents are used. Many of those patents are nearing expiration, so investors have been wondering if the company will be able to replace that income stream and maintain its dividend.

PDL has been working to make that happen, moving from managing patents to providing financing to other biotech companies. Most recently, it agreed to provide $200 million to ARIAD Pharmaceuticals in exchange for royalties on sales of Iclusig, a drug approved for the treatment of chronic myeloid leukemia in the U.S., Europe, Australia, Israel, Canada and Switzerland. That’s just one of 11 finance arrangements currently in place.

While these sorts of deals are significantly more risky than managing its own patent portfolio, analysts estimate the company’s earnings should grow by better than 5% this year, thanks to the deals it has already struck.

A much more aggressive play as evidenced by its 10.3% yield, it’s a good income option at current prices for risk-tolerant investors.