Healthcare Innovation Monthly Report | August

Key Takeaways: Healthcare Innovation ETF 

• Telemedicine and Genome Sequencing were both up almost 18% in July – reduction in long-term interest rates helped.
• WELL’s key monthly contributors were also represented by Genome Sequencing, Neuroscience and Bioinformatics.
• iRhythm the healthcare tracker company jumped 43% in July on better earnings.
• Robotic Surgery themes gained 8.6%, followed by Bioinformatics 6.9% and Medical Devices 5.9%.
• M&A activity is expected in these areas, due to discounted prices since early 2022.
• Equal weighted holdings ensure the global spread is preserved: US 69.8%, Japan 8.8%, China 4.5%, Switzerland 3.2% and Australia 2.6%. (Source: HANetf July 2022; Fact Sheet - WELL)
• WELL’s returns are driven by Medical Device holdings (25.4% weight), Biotech (2224%), Genome Sequencing (15.1%), Neuroscience (7.4%) & Telemedicine (6.0%).
• Robotics (2.1%) and Trackers (1.3%) remain small weightings - 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: 

• With healthcare costs rising to new highs - digitalization will become increasingly mainstream for treating aging populations across the industrialized world.
• Peak inflation likely reached, which should help recovery in Digital Healthcare space. [1]
• Less room for further US Fed rate rises – saw WELL gain almost 11^% in July.
• Surge in hospital Cloud Computing usage - a key booster of healthcare digitalization; embracing Telemedicine and Wearables. [2]
• With the US baby-boomer generating aging into their 70s and 80s, big healthcare demand.
• 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. [3]
• 2021 was a record-breaking year for digital health funding. [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 – if Republicans retake congress, they will potentially adopt more business-friendly approach to Healthcare Deals - boosting deal activity. [7]
• Surge in hospital Cloud Computing usage - embracing Telemedicine and Wearables. [8]

Past performance is no guarantee of future performance. Please note that all performance figures are showing net data. Source: INDXX. Data as of 31.07.2022

Past performance is no guarantee of future performance. Please note that all performance figures are showing net data. Source: INDXX. Data as of 31.07.2022

HAN-GINS Indxx Healthcare Innovation UCITS ETF – Performance (As of 31.07.22)

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 31.07.2022. Please note that all performance figures are showing net data.

Learn more about our healthcare innovation ETF here.