- The battle to combat COVID-19 is directly benefiting over 20 of our Healthcare ETF's holdings.
- Top performing holdings include Biological Engineering (Biotech) and
Medical Devices.
- Fast adoption rates of Gene Editing, Healthcare Trackers and
Telemedicine is being reflected in high growth rates.
- President Trump using Regeneron anti-body treatment has boosted
Regeneron’s stock price to new highs.
- The top 15 holdings now include Robotics, Neuroscience, Genome
Sequencing, Medical Devices and Biotech.
Performance Review
Despite a negative return in September for the HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL), WELL is up 15.37% for the year 2020,
with an impressive one-year return of 32.24%.
For September, the leading subtheme contributors to the gains have
been in Medical Devices and Biological Engineering (Biotech), which represent
15 of the 20 best performing holdings.
Both subthemes have enjoyed a rerating as COVID experienced a
second surge. Surgical Robotic leader Intuitive remains our largest holding with
Illumina, the Gene Sequencing leader, now a top 8 holding. Biotech’s impressive
gains for the month were led by Intra-Cellular (up 40.8%), Exact Sciences
(35.4%), Quidel (24.7%) and Meridian Bioscience (20.1%). Medical Device’s benefited most from gains by
Venus Medtech (31.3%), Anglo Dynamics (28.8%), Axonics (20.8%) and
Cardiovascular Systems (20.5%).
Medical devices remain the largest subtheme weighting in our Healthcare ETF at
56.84%, helping drive double digit returns since inception. However, Biological
Engineering at 23.17% is growing fast, followed by Neuroscience (6.68%), Genome
Sequencing (5.53%) and Robotics (5.13%) Healthcare Trackers (2.44%).
The COVID-19 pandemic has pushed these newer technologies to the
forefront as health insurers increasingly cover procedures including
Telemedicine. These areas continue to benefit
from faster adoption rates due to social distancing.
Past
performance is no guarantee of future performance. Source of constituent data: INDXX. Data as of 30/09/20
Healthcare Innovation ETF (WELL) Returns
September
|
YTD*
|
12 Month**
|
-1.05%
|
15.37%
|
32.24%
|
Past performance is no guarantee of future performance.
Source: Bloomberg/HANetf. *YTD figures based on 01.01.20 - 30.09.20
** 12 Month figures based on 01.10.19 – 30.09.20
HAN-GINS Indxx Healthcare Innovation UCITS ETF- Performance
Total Return NAV to Date (up to 30/09/2020)
|
1M
|
3M
|
6M
|
YTD
|
12M
|
Since Inception
|
HAN-GINS Indxx Healthcare Innovation UCITS ETF (Acc)
|
-1.05%
|
7.30%
|
33.03%
|
15.37%
|
32.24%
|
28.18%
|
Indxx Advanced Life Sciences & Smart Healthcare Thematic Indxx (NTR)
|
-0.97%
|
7.43%
|
33.56%
|
16.09%
|
33.40%
|
29.75%
|
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 30/09/20.
Healthcare Innovation - Industry News
A key
trend is increased M&A corporate activity in the healthcare innovation
space. This includes two of the largest US Telemedicine operators merging. Increasingly, Big Tech is also focusing on
this space, with Apple, Google and Amazon all offering new healthcare
initiatives from fitness/medical wearables, to online pharmacies and AI/Big
Data diagnostic devices.
In the
wake of COVID-19, the medical device area has seen a significant boost in
orders for ventilators, respirators, ultrasound, and CT scan and other
devices. This has led to rerating of
this subtheme given the significant boost in recent orders and revenues.
Separately, Frost & Sullivan
forecasts a sevenfold growth in telehealth by 2025 – a five-year compound
annual growth rate of 38.2% (from 2020).[1] Based on how fast the
healthcare industry has embraced remote technology in just the past few months,
we believe the growth rate may exceed these projections.
In the US, according to Fairhealth, Telehealth claim lines have
increased over 4,000% nationally,
from 0.15% of medical claim lines in July 2019 to 6% in April 2020.[2] This trend has continued ever since March 2020 when the pandemic started
its rapid escalation in the United States. The growth in telehealth from April
2019 to April 2020 almost doubled its 4,347% growth from March 2019 to March
2020.[3]
The global fitness
tracker market size is expected to reach $91.9bn by 2027, exhibiting a CAGR of
15.2% during the forecast period. The rising adoption of wearable devices among
the young population will significantly bolster healthy growth of the market,
states Fortune Business Insights.[4]
COVID-19 is also
propelling Gene Editing and online Healthcare Cloud Computing. Cloud usage is seen in the adoption of big
data analytics, wearable devices and remote diagnostics. The current trends
show:
- Global Healthcare Cloud Market - is expected
to reach $64.7bn by 2025 from $28.1bn in 2020 - a CAGR of 18.1%.[5]
- The genomics market is projected to
reach $82.6bn by the end of 2027. Huge R&D investments are boosting Gene
Therapies and Personalised Medicine. Based on current trends, the $18.9bn
Genomics market (2019) is set to enjoy a CAGR (annual growth rate) of 19.5%
through 2027.[6]
The rising patient
population worldwide and the older US demographic continues to drive largescale
investment in healthcare innovation, pushing both Technology upgrades and
personalised remote delivery.
Constituent News
WELL currently has
107 constituents, with the US country weighting dominating at 81.03%. It is
followed by Japan (5.16%), Switzerland (3.20%), China (2.86%) and the UK
(2.23%). Medical devices remain the largest
subtheme in the our Healthcare ETF, with a 56.84% weighting, followed by Biological
Engineering at 23.17% (includes Biotech), Neuroscience (6.68%), Genome
Sequencing (5.53%), Robotics (5.13%), Healthcare Trackers (2.44), and
Bioinformatics (0.19%).[7]
The most notable contributors to WELL’s performance in
September are listed below. A growing number of smaller Medical Device
companies are amongst WELL’s leading contributors. This is in line with this subtheme enjoying a
rerating boosted by the recent spike and resurgence of COVID cases across the
US and Europe. On the Biotech side, President Trump began using Regeneron’s new
anti-body treatment, helping the stock to a 57% gain for the year, making it
our 7th largest holding at 3.8%. The US government has also recently
placed a $450mn order for their treatment.[8]
Constituent Contributions: Top Contributors- September 2020
Company Name
|
Sub-Themes
|
September
|
Exact Sciences Corporation
|
Biological Engineering
|
0.54%
|
Quidel Corporation
|
Biological Engineering
|
0.24%
|
Align Technology, Inc.
|
Medical Devices
|
0.24%
|
BeiGene, Ltd. Sponsored ADR
|
Biological Engineering
|
0.22%
|
Hologic, Inc.
|
Medical Devices
|
0.20%
|
Alnylam Pharmaceuticals, Inc
|
Biological Engineering
|
0.20%
|
STERIS Plc
|
Medical Devices
|
0.16%
|
Insulet Corporation
|
Medical Devices
|
0.13%
|
Sysmex Corporation
|
Biological Engineering
|
0.12%
|
Adaptive Biotechnologies Corp.
|
Genome Sequencing
|
0.12%
|
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
|
September
|
Weight on close
(30/09/2020)
|
Medical Devices
|
-0.80%
|
56.84%
|
Biological Engineering
|
0.67%
|
23.17%
|
Robotics
|
-0.12%
|
5.13%
|
Neuroscience
|
-0.24%
|
6.68%
|
Genome Sequencing
|
-0.54%
|
5.53%
|
Healthcare Tracker
|
0.09%
|
2.44%
|
Bioinformatics
|
-0.06%
|
0.19%
|
Past
performance is no guarantee of future performance. Source of constituent data: INDXX. Data as of 30/09/20
Globally,
the Gene Therapy market is expected to show a decade long market growth rate of
31.1%, annualised (CAGR). While the US is currently the largest region,
Asia-Pacific is expected to be the fastest growing region over the next decade.[9]
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).
US
Government Medicare insurance (reimbursement) rules have recently broadened to
include various telehealth services. This ensures Medicare insurance will pay
for virtual/remote diagnostics and care now, creating huge demand. Post-COVID, we expect hospitals to shift a
larger volume of patient care to telehealth. We believe digital health
technologies will accelerate adoption.
The
healthcare industry is transforming in the following key ways – benefiting a
number of innovative healthcare companies:
• An explosion of telehealth
visits.
• Huge increase in remote inpatient
consultations and family visits.
• Online scheduling and the
automation of patient triage.
• Mobilising teams to create PPE
(equipment).
• Artificial intelligence to
allocate resources and make clinical decisions.
• Supporting remote work and
communication for team members.
• Ensuring connectivity at
remote COVID-19 testing sites and expanding capacity
Constituent Top Performers:
Company Name
|
Sub-Theme
|
September Return
|
Intra-Cellular Therapies, Inc.
|
Biological Engineering
|
40.83%
|
Exact Sciences Corporation
|
Biological Engineering
|
35.41%
|
Venus Medtech (Hangzhou), Inc. Class H
|
Medical device
|
31.26%
|
AngioDynamics, Inc.
|
Medical Devices
|
28.78%
|
Quidel Corporation
|
Biological Engineering
|
24.68%
|
Axonics Modulation Technologies, Inc.
|
Medical Devices
|
20.78%
|
Cardiovascular Systems, Inc.
|
Medical Devices
|
20.45%
|
Meridian Bioscience, Inc.
|
Biological Engineering
|
20.08%
|
Shockwave Medical, Inc.
|
Medical Devices
|
19.29%
|
Biocon Limited
|
Biological Engineering
|
18.68%
|
BeiGene, Ltd. Sponsored ADR
|
Biological Engineering
|
18.57%
|
Health Catalyst, Inc.
|
Bioinformatics
|
17.38%
|
Adaptive Biotechnologies Corp.
|
Genome Sequencing
|
16.87%
|
SAGE Therapeutics, Inc.
|
Neuroscience
|
16.55%
|
BioTelemetry, Inc.
|
Healthcare Tracker
|
15.16%
|
Peptidream Inc.
|
Biological Engineering
|
14.84%
|
InMode Ltd.
|
Medical Devices
|
14.39%
|
Eiken Chemical Co., Ltd.
|
Medical Devices
|
11.50%
|
Hologic, Inc.
|
Medical Devices
|
11.30%
|
DiaSorin S.p.A.
|
Biological Engineering
|
11.25%
|
STERIS Plc
|
Medical Devices
|
10.37%
|
Align Technology, Inc.
|
Medical Devices
|
10.23%
|
Silk Road Medical, Inc.
|
Medical Devices
|
10.22%
|
Past performance is
no guarantee of future performance. Source:
INDXX. Data as of 30/09/20
Regional Breakdown
Country Breakdown
|
Weights
|
United States
|
81.03%
|
Japan
|
5.16%
|
Switzerland
|
3.20%
|
China
|
2.86%
|
United Kingdom
|
2.23%
|
Other
|
5.52%
|
Sector Breakdown
Sub-theme
|
Weight
|
Genome Sequencing
|
5.53%
|
Medical Devices
|
56.84%
|
Neuroscience
|
6.68%
|
Biological engineering
|
23.17%
|
Healthcare Tracker
|
2.44%
|
Robotics
|
5.13%
|
Bioinformatics
|
0.19%
|
Top 15 Holdings - Constituent Breakdown
Company Name
|
Sub-Themes
|
Weight (%)
|
Intuitive Surgical Inc
|
Robotics
|
5.08
|
Edwards Lifesciences Corp
|
Biological engineering
|
4.75
|
Medtronic PLC
|
Medical Devices
|
4.69
|
Biogen Inc
|
Neuroscience
|
4.45
|
Boston Scientific Corp
|
Neuroscience
|
4.44
|
DexCom Inc
|
Healthcare Trackers
|
4.19
|
Regeneron Pharmaceuticals Inc
|
Biological engineering
|
3.75
|
Illumina Inc
|
Genomics
|
3.55
|
Agilent Technologies Inc
|
Medical Devices
|
3.45
|
Zimmer Biomet Holdings Inc
|
Medical Devices
|
3.12
|
ResMed Inc
|
Medical Devices
|
2.73
|
Align Technology Inc
|
Medical Devices
|
2.63
|
West Pharmaceutical Services I
|
Biological engineering
|
2.23
|
Olympus Corp
|
Medical Devices
|
2.18
|
Hologic Inc
|
Medical Devices
|
1.90
|
Source: Bloomberg/HANetf. Data as of
30/09/20
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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