Healthcare Innovation Monthly Report | July

Key Takeaways: Healthcare Innovation ETF 

•  WELL’s key monthly contributors were represented across all its subthemes – led by Phreesia 9.5% (Analytics), Alibaba Health 8.7% (Bioinformatics), Veeva Systems 4.1% (Bioinformatics), Amicus Therapeutics 2.1% (Genome Sequencing) and Microport Scientific 1.8% (Medical Devices).
• Genome Sequencing, Neuroscience and Bioinformatics holdings were amongst the top performers. (see table).
• Bioinformatics gained 13.1%, followed by Healthcare Analytics up 8.2% and Neuroscience up 3.8%.
• Additional M&A activity is expected in these areas, given the discounted prices from the start of 2022.
• Holdings remain increasingly global, helped by our equal weighted approach: US 67.3%, Japan 7.9%, China 6.8%, Switzerland 3.3% and Netherlands 2.2%. (Source: HANetf June 2022; Fact Sheet - WELL)
• Due to persistent high inflation - all 9 subthemes continue to suffer declines – led by Gene Sequencing and Healthcare Analytics.
• WELL’s returns are driven by Medical Device holdings (29.1% weight), Biotech (28.4%), Genome Sequencing (13.6%), Neuroscience (11.3%) & Telemedicine (6.0%).
• Due to price compression, Gene Sequencing’s weight has come down in favour of Neuroscience. Robotics (2.1%) and Trackers (2.0%) remain small weightings due to the limited number of listed companies.

Please note that all performance figures are showing data. Past performance is no guarantee of future performance. Source of all data: Gins Global.

Macro Outlook:

• 2021 was a record-breaking year for digital health funding. [1]
• Global funding for the digital health sector grew 79% year over year – to a record $57.2bn. [2]
• 2021 produced 85 new Unicorns in the digital health space, a new record. [3]
• In 2022 with significantly lower valuations – key trend in digital health will be consolidation.
• 574 M&A deals globally re digital health companies in 2021 - increase of 44% over 2020. Includes Best Buy’s acquisition of Current Health for $400mn & 23andMe’s acquisition of Lemonaid for $400mn. [4]
• Digitalization increasingly best way to reduce excessive healthcare costs in the industrialized world. [5]

• COVID boosted Telehealth adoption, but some of these companies are losing money – leading to a big price correction. [6]
• US midterm elections likely to see Republicans retake Congress. Will adopt more business-friendly approach to Healthcare Deals =- boosting corporate activity. [7]
• Once the US Fed rate rises approach their ceiling – we expect valuations to recover.
• Surge in hospital Cloud Computing usage - a key booster of healthcare digitalization; embracing Telemedicine and Wearables. [8]
• Oracle’s purchase of Cerner serving doctors/patients ($30bn), Microsoft’s $26bn Nuance Communications acquisition & Google Cloud’s digitalization deal with one of the largest US hospital groups (HCA Healthcare 2000+ locations) – highlights increasing Tech adoption. [9]

Past performance is no guarantee of future performance. Please note that all performance figures are showing net data. Source: INDXX. Data as of 30.06.2022

Past performance is no guarantee of future performance. Please note that all performance figures are showing net data. Source: INDXX. Data as of 30.06.2022

HAN-GINS Indxx Healthcare Innovation UCITS ETF – Performance (As of 30.06.22)

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 30.06.2022. Please note that all performance figures are showing net data.

Learn more about our healthcare innovation ETF here.