Healthcare Innovation Monthly Report | July

 

  • The fight to combat COVID-19 has led to over 20 of WELL’s constituents directly benefiting from increased demand.
  • WELL’s holdings are at the forefront of vaccine research, plus supplying PPE materials and producing ventilators and other medical devices.
  • Biological Engineering (Biotech), Genome Sequencing and Healthcare Trackers/Wearables have all been key contributors to the June performance of our wellness ETF

 

Performance Review

HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL) hit a new all-time high in late June, posting another record gain of 1.37%. For the year 2020, our wellness ETF is up 7.52%, while over the past 12 months it has returned 18.77%. During June, the leading subtheme contributors to the gains have been in Biological Engineering, Genome Sequencing and Healthcare Trackers (See table on next page). Biological Engineering which includes Biotech players such as Regeneron, had a very positive June, contributing 1.2% of performance to WELL. The search for a COVID-19 vaccine has propelled this subtheme’s performance.

For the month of June, this Biological Engineering theme has dominated all other subtheme performance – contributing 1.16% out of WELL’s 1.37% total gain. It is followed by Genome Sequencing with a far smaller 0.20% gain.  Both areas have benefited from the COVID-19 tailwinds as a number of our holdings are at the forefront of vaccine research in this area. The standout June performers were as follows: Accelerate Diagnostics (Genome) was up 82%, followed by Meridian (Biological) 50.7%, MicroPort (Devices) 39.3%, Hansa Biopharma (Biological) up 40.0%, TransMedics (Biological) 36.7%, Huamai Corp (Trackers) 31.5%, Quidel (Biological) 27.9%, Shandong (Devices) 27.2%, Intra-Cellular Therapies (22.9%) and Resmed (Devices) 19.4%.

Past performance is no guarantee of future performance Source: INDXX. Data as of 30/06/20

 

Wellness ETF (WELL) Returns

June

YTD*

12 Month**

1.37%

7.52%

18.77%

Past performance is no guarantee of future performance.
Source: Bloomberg/HANetf
*YTD figures based on 01.01.20 - 30.06.20
** 12 Month figures based on 30.06.19 – 30.06.20

 

Sub-theme Contribution to WELL

Sub-theme Performance

YTD

June

Biological Engineering

6.85%

1.16%

Healthcare Tracker

0.57%

0.08%

Neuroscience

-0.17%

-0.70%

Nanotechnology

0.01%

0.00%

Bioinformatics

-0.02%

0.01%

Genome Sequencing

0.83%

0.20%

Robotics

-0.21%

-0.08%

Medical Devices

-0.07%

-0.11%


Past performance is no guarantee of future performance Source: INDXX. Data as of 30/06/20

 

HAN-GINS Indxx Healthcare Innovation UCITS ETF - 1YR Performance (28.06.19 - 30.06.20)

 

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: INDXX. Data as of 30/06/20

 

Constituent News

WELL has 107 constituents, with the US country weighting dominating at 82%.

WELL recently underwent a re-balance on 30th June with 10 new additions and 5 deletions. The new additions represent a diverse group covering the following subthemes: Genome Sequencing, Biological Engineering, Robotics, Healthcare Trackers, Medical Devices, Neuroscience and Bioinformatics.

Medical devices remain the largest subtheme in the WELL ETF with a 43% weighting – see the full weightings on page 5.

Notable contributors to WELL performance in June include:

Quidel:  Specialises in the diagnostics and detection of diseases and offers very fast turnaround times. This places it in an elite group of COVID-19 players able to assist with the infectious disease outbreak. In March, Quidel became one of the first companies to receive ‘Emergency Use Authorization’ from the US Food and Drug Administration for a COVID-19 diagnostic test.

Dexcom: Offer an alternative for diabetes suffers – beyond using fingersticks, to check their blood sugar levels. DexCom's G6 continuous glucose monitoring (CGM) system uses a small easy-to-wear sensor and transmitter. This wearable sends glucose numbers to a smart device every five minutes and provides alerts when levels are too high or too low.

Accelerate Diagnostics: This medical device company tests for bacteria and fungus infections in hospitals and patients. When hospital patients are invaded with bacteria or fungus, they can suffer from extreme immune response known as  sepsis. This is one of the leading causes of hospitalisations in the US. With hospitalisation spiking due to COVID-19 this firm is benefiting from increased sepsis testing.

Meridian:  One of its reagents is being used in a number of different tests for the coronavirus.  It is extremely stable, can be easily stored and can be conducted quickly and/or remotely – a key feature with coronavirus testing. Since the outbreak, it is considered a ‘coronavirus stock’ because its goods are being used by over 35 diagnostic companies around the globe for testing during the pandemic. [1]

 

Healthcare Innovation – Industry News

COVID-19 supply constraints are providing a boon to medical device and product manufacturers, particularly those focused on PPE & devices related to the pandemic (e.g. gloves, masks, respirators, ventilators). Fisher & Paykel, another WELL holding (up 23.5% in June), is a leading supplier of respiratory equipment - which has seen a big rise in demand, due to the current pandemic’s supply constraints.

Before COVID-19, usage of telehealth services was estimated to be in the single digits in the US - largely in the areas of mental health. However, according to a survey from IMS Health (US healthcare data provider) - telehealth services used by clinicians surged past 50% in April. [2]

US Government Medicare insurance (reimbursement) rules have recently broadened to include various telehealth services. This ensures Medicare insurance will pay for virtual care now, creating huge demand. Post-COVID, analysts expect hospitals to shift a larger volume of patient care to telehealth. We expect digital health technologies to see accelerated adoption. Digital pharmacies should deliver opportunities for investors, and major e-commerce companies will likely speed up entry into the health-care marketplace.

We predict the healthcare industry transforming in the following key areas, benefiting a number of innovative healthtech companies along the way:

  • An explosion of telehealth visits.
  • Huge increase in remote inpatient consultations and family visits.
  • Online scheduling and the automation of patient triage.
  • Artificial intelligence to allocate resources and make clinical decisions.
  • Supporting remote work and communication for team members.
  • Mobilising teams to create PPE (equipment).
  • Ensuring connectivity at remote COVID-19 testing sites and expanding capacity.

 

We believe that the WELL ETF is positioned to benefit from these trends.

 

Top June Performance Contributors (Holdings)

Company Name

Sub-Themes

June

Adaptive Biotechnologies Corp.

Genome Sequencing

0.11%

Align Technology, Inc.

Medical Devices

0.33%

Alnylam Pharmaceuticals, Inc

Biological Engineering

0.16%

BeiGene, Ltd. Sponsored ADR

Biological Engineering

0.19%

BioMarin Pharmaceutical Inc.

Biological Engineering

0.33%

DexCom, Inc.

Medical Devices

0.19%

Fisher & Paykel Healthcare Corporation Limited

Medical Devices

0.28%

Hologic, Inc.

Medical Devices

0.14%

Olympus Corp.

Medical Devices

0.25%

Quidel Corporation

Biological Engineering

0.10%

Past performance is no guarantee of future performance Source: INDXX. Data as of 30/06/20

 

Region Breakdown

Country Breakdown

Weights

United States

81.40%

Japan

5.65%

Switzerland

2.78%

United Kingdom

2.53%

China

2.45%

Other

5.18%

 

 

Sector Breakdown

Sub-theme

Weight

Medical Devices

43.33%

Biological engineering

32.39%

Neuroscience

9.93%

Healthcare tracker

5.37%

Genome sequencing

4.74%

Robotics

4.08%

Bioinformatics

0.10%

Nanotechnology

0.05%

 

Top 15 Holdings

Industry

Weights

Regeneron Pharmaceuticals, Inc.

Biological Engineering

6.5%

DexCom, Inc.

Medical Devices

4.6%

Biogen Inc.

Neuroscience

4.2%

Intuitive Surgical, Inc.

Robotics

4.1%

Edwards Lifesciences Corporation

Medical Devices

4.1%

Illumina, Inc.

Genome Sequencing

3.9%

Agilent Technologies, Inc.

Medical Devices

3.6%

ResMed Inc.

Medical Devices

3.5%

Medtronic Plc

Medical Devices

3.5%

Boston Scientific Corporation

Medical Devices

3.2%

Zimmer Biomet Holdings, Inc.

Medical Devices

3.1%

BioMarin Pharmaceutical Inc.

Biological Engineering

2.8%

Olympus Corp.

Medical Devices

2.7%

Align Technology, Inc.

Medical Devices

2.6%

Smith & Nephew plc

Medical Devices

2.0%

Source of all data: HANetf, Data as of 30/06/20

 

Learn more about HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL)

HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL) is a UCITS compliant Exchange Traded Fund domiciled in Ireland.

WELL tracks the Indxx Advanced Life Sciences & Smart Healthcare Thematic Index (Net Total Return), an index designed to measure the performance of large, mid and small-capitalisation companies primarily listed on an exchange in Developed and Emerging Markets that are involved in the Advanced Life Sciences & Smart Healthcare sector.

Please remember that the value of your investment may go down as well as up and past performance is no indication of future performance. 

EXCHANGE

BB CODE

RIC

ISIN

CURRENCY

INCOME

London Stock Exchange

WELL LN

HAWELL.L

IE00BJQTJ848

USD

Acc

London Stock Exchange

WELP LN

WELP.L

IE00BJQTJ848

GBP

Acc

Borsa Italiana

WELL IM

WELL.MI

IE00BJQTJ848

EUR

Acc

XETRA

W311 GY

W311.DE

DE00A2PE7K4

EUR

Acc

SIX

WELL SW

WELL.S

IE00BJQTJ848

CHF

Acc

 

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