Medical ETFs: Key Takeaways
- Healthcare innovation has become a key focus area to combat COVID-19.
- Many WELL holdings are at the forefront of vaccine research, supplying PPE materials and producing ventilators.
- Innovative healthcare firms are likely long term beneficiaries of required healthcare changes (wearables, telemedicine etc.).
Performance Review - Medical ETF Monthly Performance
HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL) has recovered well during April, gaining almost 12%.
For the year 2020, the medical ETF is down just over 2%. Demand for remote healthcare (Telemedicine, Robotics, Wearables) and biotech/gene therapies - has boosted demand for many of WELL’s stock holdings.
The S&P Composite 1500 Healthcare Index and MSCI World Health industry benchmark have performed similarly for now, matching WELL during 2020 (see chart). However over the past 3 years, WELL has outperformed both these health benchmarks significantly.
Over the past few months both the S&P and MSCI benchmarks have seen a recovery off very low levels – led by some of the Big Pharma global holdings. The COVID-19 pandemic has led to this rebound in the hoped of a possible vaccine being led and mass produced by Big Pharma.
During 2020, the largest underlying contributors to performance were as follows: Regeneron (40.9%), DexCom (52.8%) and Quidel Corp (85.8%).
Other significant performers with smaller weightings included: QIAGEN (18.3%), Sysmex Corp (10.7%), Livongo Health (52.7%), Fisher & Paykel (12.4%), Insulet Corporation (10.4%) and West Pharmaceutical Services (8.8%).
Subthemes performing best for 2020 at the end of April - were Biological Engineering and Healthcare Trackers
|
Sub-theme
|
Contribution to
Return
|
|
Biological Engineering
|
2.10%
|
|
Healthcare Tracker
|
0.18%
|
|
Biological Engineering/ Medical Devices
|
0.08%
|
|
Neuroscience
|
0.04%
|
|
Medical Devices/Nanotechnology
|
0.01%
|
|
Bioinformatics
|
-0.03%
|
|
Genome Sequencing
|
-0.13%
|
|
Robotics
|
-0.66% |
|
Medical Devices
|
-4.33%
|
|
|
|
|
YTD Price Performance
|
2.76%
|
Past performance is no guarantee of future performance
Source: INDXX sourced from FactSet. Data as of 30/04/20
Performance before inception is based on back tested data. Back testing is the process of evaluating an investment
strategy by applying it to historical data to simulate what the performance of such strategy would have been. Back tested
data does not represent actual performance and should not be interpreted as an indication of actual or future 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. Data as of 30/04/20.
Constituent News
Rapid adoption of WELL products in the fight against the novel Coronavirus, has ensured the resilience of WELL’s portfolio
performance during this period. At least 21 of our 100 underlying holdings are at the forefront of fighting COVID-19. Below
we highlight some of the latest news. The COVID-19 crisis is fast-tracking adoption rates across a variety of healthcare
technology products and services. Specific healthcare areas where WELL is benefiting includes:
- Tracking devices (medical wearables)
- Cloud based services (remote telehealth/telemedicine, chatbots and robots)
- AI diagnostic smart machines – allows for less human contact.
- COVID-19 vaccines - Regeneron our largest holding is amongst the leaders currently.
- PPE equipment and ventilators (Medtronic and other holdings are playing a pivotal role here).
PPE equipment and ventilators (Medtronic and other holdings are playing a pivotal role here).
Regeneron Pharmaceuticals, Inc. has identified hundreds of virus-neutralizing antibodies; plans to initiate large-scale
manufacturing by mid-April with antibody cocktail therapy. This biotech leader is at the forefront of the race to find a vaccine
for COVID-19. It is WELL’s largest holding. (1)
Smith & Nephew plc is contracting with the U.K. government to build a new ventilator specifically designed for the largescale production needed to combat the spread of COVID-19. (2)
QIAGEN NV has been granted an emergency use authorization by the US FDA, for a diagnostic test that the company said
can differentiate among COVID-19 and 20 other respiratory diseases (3)
Bio-Rad Laboratories, Inc’s products are used in research and clinical laboratories around the world, contributing to
advancement of COVID-19 research, SARS-CoV-2 screening assays, and vaccine development. (4)
BioTelemetry, Inc. is a leading remote medical technology company focused on the delivery of health information to
improve quality of life and reduce cost of care, recently announced the activation of an expanded service using its Mobile
Cardiac Outpatient Telemetry (MCOT(TM)) to monitor life-threatening QT prolongation in COVID-19 patients. (5)
Boston Scientific Corporation – is collaborating with hospitals, universities and industry peers to find new and innovative
ways to address the urgent demand for protective personal equipment (PPE) and ventilators. (6)
DiaSorin S.p.A. has received the Emergency Use Authorization (EUA) from the FDA for their Simplexa™ COVID-19 Direct
kit. The kit provides a sample-to-answer test for the detection of severe acute respiratory syndrome coronavirus 2 (SARSCoV-2), the virus that causes COVID-19, directly from nasopharyngeal swab specimens. (7)
Alnylam Pharmaceuticals, Inc announced an expansion of its development and commercialization of RNAi therapeutics
targeting SARS-CoV-2, the virus that causes the disease COVID-19. (8)
Avanos Medical, Inc. has increased production multiple fold of its respiratory health products to help treat COVID-19
patients. (9)
ResMed Inc. is delivering the ventilation therapy that is essential to treat the respiratory complications of COVID-19. (10)
Eiken Chemical Co., Ltd. is moving forward with the development of a reagent for detecting the COVID-19 coronavirus using
the LAMP method*, a gene amplification method developed exclusively by Eiken Chemical. (11)
Hologic, Inc. Hologic’s Molecular Test for the Novel Coronavirus, SARS-CoV-2, Receives FDA Emergency Use Authorization.
(12)
Luminex Corp In response to the global outbreak of the novel coronavirus disease (COVID-19), Luminex has developed
multiple solutions to enhance its NxTAG® and ARIES® testing offerings in order to automate and facilitate the detection of
coronavirus. As a high-throughput, more comprehensive option, they have developed the NxTAG® CoV Extended Panel,
which can detect SARS-CoV-2, and was authorized by the US FDA and Health Canada for Emergency Use Authorization
(EUA). (13)
Medtronic Plc (NYSE:MDT), the global leader in medical technology, today announced its Medtronic Care
Management Services (MCMS) business is launching two new solutions designed to help assess, monitor, and triage
support for patients who may be concerned about COVID-19 and their respiratory symptoms. It has already launched its
new Respiratory Infectious Disease Health Check to existing MCMS customers, and it is now launching a new COVID-19
Virtual Care Evaluation and Monitoring solution available to U.S. health systems, health plans and employers. It is also
helping with the production and delivery of more ventilators globally. (14)
Source: Bloomberg / HANetf. Data as of 30/04/20
Learn more about HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL)
Article Date: 14th May 2020.