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Healthcare Innovation Monthly Report | August

  • A large number of our Healthcare ETF’s constituents are directly benefiting from COVID-19 requirements and healthcare changes. 
  • WELL’s biotech holdings are at the forefront of vaccine research.
  • Medical device makers are amongst the biggest suppliers of PPE materials, ventilators and other respiratory equipment. 
  • Biological Engineering (Biotech), Robotics and Healthcare Trackers are key contributors to the July performance of our wellness ETF

Performance Review

HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL) continued its strong recent growth, gaining 7.33% in July. For the year 2020, our Healthcare ETF is up 15.39%, while over the past 12 months it has returned 27.51%.

During July, the leading subtheme contributors to the gains have been in Medical Devices, Biological Engineering (Biotech), Robotics and Healthcare Trackers.

Biological Engineering which includes Biotech players such as Edwards Life Sciences, Regeneron, Boston Scientific, Biogen and ResMed – remain amongst the Top 10 holdings. The largest contributors to performance this month included Intuitive Surgical, a leading robotic surgery player and Livongo Health. Intuitive now has the largest weighting in WELL at 4.91%.

 

Wellness ETF (WELL) Returns

July YTD*  12 Month**
7.33% 15.39%  27.51% 
Past performance is no guarantee of future performance. Source: Bloomberg/HANetf

 *YTD figures based on 01.01.20 - 31.07.20 ** 12 Month figures based on 01.08.19 – 31.07.20

 

For the month of July, medical devices remained the largest sub-theme weighting in WELL.  Consequently, it is not surprising it has contributed most of the subthemes to WELL’s returns in July. However, Robotics, Biological Engineering and Healthcare Trackers have all shown solid performance – contributing significantly too. These areas have all benefited from the COVID-19 tailwinds as a number of our holdings are at the forefront of vaccine research in this area.

By the end of July, WELL had hit a new all-time high above $10 per share*.

*Source: HANetf, Bloomberg. Data as of 19.08.2020

The standout July constituent performers include:

  • Seegene, Inc. (Medical Devices) 133.07%
  • Livongo Health, Inc. (Healthcare Tracker) 69.24%
  • Hansa Biopharma (Biological Engineering) 53.53%

Past performance is no guarantee of future performance. Source of constituent data: INDXX. Data as of 31/07/20

 

HAN-GINS Indxx Healthcare Innovation UCITS ETF – 12 Month Performance (01.08.19 - 31.07.20)

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 31/07/20

 

Healthcare Innovation – Industry News

The healthcare industry is increasingly using remote technology such as telemedicine, tracking devices, the cloud and robotics.  Medical devices that can enhance such needs are increasingly in demand.  Most recently, Google Cloud invested $100mn in Amwell, one of the largest telehealth providers. This follows news that its largest competitor, Teladoc, merged with Livongo, one of our holding, for $18.5 billion [1].  As patients increasingly seek to avoid in-person medical help at hospitals and clinics, such remote tools facilitating virtual visits has skyrocketed in recent months.  

COVID-19 supply constraints are providing a boom to medical device and product manufacturers, particularly those focused on PPE & devices related to the pandemic (e.g. gloves, masks, respirators, ventilators).

With the US Government’s Medicare insurance programme now reimbursing most telehealth services - this ensures remote/virtual medical care will become increasingly the norm for those preferring the convenience of home visits for regular check-ups where possible.

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.

In the U.S., the telehealth market now has an anticipated five-year compound annual growth rate of 38.2 percent [2]. This equates to a staggering seven-fold increase by 2025. Furthermore, Telehealth, is anticipated to rise 64.3% in 2020, according to a recent Frost & Sullivan report [3].

 

Constituent News

WELL has 107 constituents, with the US country weighting dominating at 82.13%. It is followed by Japan (4.39%), Switzerland (3.01%), China (2.65%) and the UK (2.36%) [4].

Our Healthcare ETF 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 42.93% weighting.

The most notable contributors to WELL’s performance in July include the following holdings. This is based on their weightings during the month:

Constituent Contribution

Company Name

Sub-Themes

July Contribution

Intuitive Surgical, Inc.

Robotics

0.89%

Edwards Lifesciences Corporation

Medical Devices

0.59%

Livongo Health, Inc.

Healthcare Tracker

0.55%

Boston Scientific Corporation

Medical Devices

0.43%

Hologic, Inc.

Medical Devices

0.39%

Zimmer Biomet Holdings, Inc.

Medical Devices

0.38%

West Pharmaceutical Services, Inc.

Biological Engineering

0.36%

DexCom, Inc.

Medical Devices

0.33%

ABIOMED, Inc.

Medical Devices

0.31%

Agilent Technologies, Inc.

Medical Devices

0.29%

 

It is clear the largest contributors are mostly Medical Device companies. Due to COVID-19 this is expected to continue as the market’s focus remains on finding a vaccine, plus areas such as testing and tracking.

Sub-theme Contribution

 

Sub-theme

July Contribution

Medical Devices

5.01%

Biological Engineering

0.91%

Robotics

0.92%

Neuroscience

-0.01%

Genome Sequencing

0.02%

Healthcare Tracker

0.55%

Bioinformatics

-0.06%

Healthcare Trackers

0.03%

Past performance is no guarantee of future performance. Source of data: INDXX. Data as of 31/07/20

 

The healthcare ETF is positioned to benefit from a number of technological trends spurred on by COVID. The adoption rates seen over the last 5 months would typically take place over a number of years. Public and private hospitals are experiencing a transformation that will last well beyond COVID as behaviours are changed for good due to technological advances in the following areas:

Telehealth innovations include:

  • User-friendly sensors and remote diagnostic equipment - yielding a high rate of successful patient outcomes.
  • Practical applications of artificial intelligence (AI), Interactive Virtual Assistants (IVAs), and robotics.
  • Big data analytics - helps researchers learn more about the way COVID-19 advances across diverse patient populations.
  • Conforming to cyber security and privacy regulations - avoiding data breaches.

 

Additional conveniences and cost savings will be found in these related areas:

  • 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.

 

Telehealth Market by Region ($bn)

 

  For illustrative purposes only. Source: https://www.marketsandmarkets.com/Market-Reports/telehealth-market-201868927.html

 

Constituent Performance

Company

Sub-theme

July Performance

Seegene, Inc.

Medical Devices

133.07%

Livongo Health, Inc.

Healthcare Tracker

69.24%

Hansa Biopharma AB

Biological Engineering

53.53%

Quidel Corporation

Biological Engineering

26.25%

ABIOMED, Inc.

Medical Devices

24.17%

Penumbra, Inc.

Medical Devices

24.10%

Twist Bioscience Corp.

Biological Engineering

23.71%

Hologic, Inc.

Medical Devices

22.42%

Axonics Modulation Technologies, Inc.

Medical Devices

20.65%

MicroPort Scientific Corp.

Medical Devices

20.52%

Intuitive Surgical, Inc.

Robotics

20.29%

Health Catalyst, Inc.

Bioinformatics

19.64%

bioMerieux SA

Biological Engineering

18.37%

West Pharmaceutical Services, Inc.

Biological Engineering

18.36%

Demant A/S

Medical Devices

17.70%

Past performance is no guarantee of future performance. Source: INDXX. Data as of 31/07/20

 

Regional Breakdown

Country Breakdown  Weights 
United States  82.13% 
Japan  4.39% 
Switzerland   3.01% 
China  2.65% 
United Kingdom  2.36% 
Other  5.46% 

 

Sector Breakdown 

Sub-theme Weight 
Medical Devices  42.93% 
Biological engineering  0.00% 
Neuroscience  28.84% 
Healthcare tracker  4.95% 
Genome sequencing  6.10% 
Robotics  11.16% 
Bioinformatics   0.52% 
Nanotechnology  0.05% 

 

Constituent Breakdown

Top 15 Holdings

Industry

Weights

Intuitive Surgical, Inc.

Robotics

4.91%

Edwards Lifesciences Corporation

Medical Devices

4.67%

Boston Scientific Corporation

Medical Devices

4.48%

DexCom, Inc.

Medical Devices

4.43%

Illumina, Inc.

Genome Sequencing

4.38%

Medtronic Plc

Medical Devices

4.35%

Biogen Inc.

Neuroscience

4.31%

Regeneron Pharmaceuticals, Inc.

Biological Engineering

4.23%

Agilent Technologies, Inc.

Medical Devices

3.29%

ResMed Inc.

Medical Devices

3.23%

Zimmer Biomet Holdings, Inc.

Medical Devices

3.09%

BioMarin Pharmaceutical Inc.

Biological Engineering

2.39%

Align Technology, Inc.

Medical Devices

2.36%

West Pharmaceutical Services, Inc.

Biological Engineering

2.18%

Hologic, Inc.

Medical Devices

1.99%

Source of all data: HANetf, Data as of 31/07/20

 

Fund Details

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  IE00BJQ848 USD  Acc
London Stock Exchange WELP LN WELP.L  IE00BJQ848 GBP  Acc
Borsa Italiana WELL IM WELL.MI  IE00BJQ848 EUR  Acc
XETRA W311 GY W311.DE  DE00A2PE7K4 EUR Acc
SIX WELL SW WELL.S 

IE00BJQ848

EUR Acc

 

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