Equal Weight Monthly Report | November

Equal Weight ETF Monthly Report: Key Takeaways

• Digital Health revolution in full swing due to COVID fast-tracking. [1]
• Big Tech deals more active in Healthcare - acquisitions and disruptive opportunities. [2]
• US Healthcare huge inefficiencies - almost 20% of US GDP. Current lack of Tech integration. [3]
• Expect higher valuations particularly in the Genomics, Biotech, Wearables, Analytics and Telemedicine space. [4]
• Cloud computing is facilitating Telemedicine, Wearables, Healthcare Data and Genetic Sequencing - benefiting from the global use of Cloud and uploading phased trial data. [5]
• Hospitals amongst the fastest adopters of Cloud technology, boosting their commitment to Telemedicine and Wearables. [6]
• Standout subthemes for 2021 returns: Neuroscience up 39.3%, Medical Devices 17.4% and Healthcare Analytics 10.8%. [7]
• Top monthly contributors across multiple themes – Healthcare Trackers up 9.9% (IRhythm), Telemedicine (Optimizerx 1.6%, Teledocs 2.3%), Bioinformatics (Veeva 2.5%, Health Catalyst 1.3%), Neuroscience (Xenon Pharma 10.4%) and Healthcare Analytics (Phreesia 2.1%, JMDC 1.2%) [8]
• Ten subthemes, with Equal Weight across all 105 current holdings. [9]
• Healthcare sector increasingly global – with the US at 70.4%, Japan 7.4%, China 4.0% and Europe 14.1%. [10]

Macro Outlook

• Digital Healthcare space is experiencing an influx of Big Tech deals. The US Healthcare industry is ripe for Tech upgrades, with healthcare representing almost 20% of US GDP8. [11] We predict 30% annual growth in digital health to 2025. Digital adoption rates across Telemedicine, Data/Analytics, Wearables, Biotech and Gene Editing continue to spike as these areas become part of mainstream medicine. [12]
• Digital Health estimated at $152.5bn in 2020, projected to reach a revised size of US$456.9bn by 2026 - CAGR of 18.8% annually. [13]
• Telemedicine continues fast uptake and favourable consumer perception – telehealth uses up 38 fold from pre COVID levels. [14]
• In US ~$250bn or 20% of all health spend could be virtualised. [15]
• North America dominates Telemedicine – at approximately double the size of Europe and 6 times larger than Asia-Pacific. [16]
• Global DNA sequencing market size to hit ~$40bn by 2030 * just $8.4bn currently. [17]
• Rapid advancements in sequencing technology and bioinformatics – enabling the identification of DNA variations. [18]
• Cancer (oncology) considered a genomic disease and next-generation sequencing techniques are expected to play a key role in providing timely and accurate diagnosis of the disease in its early stages. [19]
• Since COVID and the WFH phenomenon, the industry has raised record amounts of new capital. New CRISPR technology is fuelling the race for more precision or customised medicine. [20]
• CRISPR makes it easier to determine the genes and proteins that cause/prevent disease. It helps identify new targets for potential drugs. [21]

Top Subtheme Contributions

For illustrative purposes only. Past performance is no guarantee of future performance. Please note that all performance figures are showing net data.
Source: INDXX. Data as of 31.10.2021

• WELL’s benchmark continues to benefit from large holdings across three key subthemes which are all above 20% weightings. These include Genome Sequencing. Medical Devices and Biological Engineering (Biotech).
• Cloud Healthcare market is expanding rapidly across hospitals and is likely to dominate IT spending in this space for the next few years. [22]
• Cybersecurity spending is also likely to see a big increase in the healthcare space as privacy concerns and potential hacks, increasingly concern most hospital groups.

Equal Weight ETF - Performance

Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product.
Source: Bloomberg / HANetf. Data as of 31/10/2021. Please note that all performance figures are showing net data.

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