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Healthcare Innovation Monthly Report | December

 

  • Healthcare Innovation will be one of the megatrends in 2021
  • Top performing holdings were spread across Gene Sequencing, Biological Engineering (Biotech) and Medical Devices.
  • COVID-19 is fast-tracking the adoption of healthcare innovations – driving huge spending in Telemedicine, Healthcare cloud computing and Genome Sequencing research. 
  • The Biden administration is likely to unleash large US government healthcare spending- supporting medical devices and digitalization.
  • Innovative healthcare delivery is now a major US policy priority due to COVID-19.

 

Performance Review

HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL), our healthcare ETF, enjoyed good gains in November with a 6.71% return.  For the year 2020, WELL is up 20.57%, with a one-year return of 21.53%.

Healthcare Innovation ETF (WELL) Returns


November


YTD*


12 Month**


6.71%


20.57%


21.53%

Past performance is no guarantee of future performance. Source: Bloomberg/HANetf *YTD figures based on 01.01.20 - 30.11.20 ** 12 Month figures based on 01.12.19 – 30.11.20

 

For the month, the leading subtheme contributors to these gains in our healthcare ETF have been in Medical Devices, Biological Engineering (Biotech), Genome Sequencing and Robotics. These subthemes have enjoyed a rerating during COVID, becoming increasingly mainstream across healthcare providers.

Illumina, the Gene Sequencing leader gained 10.0%, with other gene players like CRISPR Therapeutics gaining 38.2%, Beam Therapeutics up 46.3% and Cellectis SA 59.5%. The top performing Biotech plays include GW Pharmaceuticals, up 55.6%, Akebia Therapeutics up 49.1% and Sysmex Corp up 11.8%.  Please see table on page 3 for full breakdown. Robotics pioneer Intuitive Surgical gained 8.8% for the month. At 5%, it is WELL’s largest holding, followed by Medtronics, Edwards Lifesciences, Agilent, Align and Boston Scientific.

Top Medical Device contributors for the month included Edwards Lifesciences (up 17.0%), Agilent Technologies (14.5%), Medtronic PLC (13.06%) and Align Technology (13.0%). Medical devices remain the largest subtheme, weighting in WELL at 58.69%.

For the year, our top performing holdings are Seegene (Medical Devices up 540.7%), Twist Bioscience (Biotech 432.1%), MicroPort (Medical Devices 264.2%) and iRhythm Tech (Healthcare Trackers 259.1%.

The COVID-19 pandemic is increasingly mainstreaming many innovative healthcare treatments, devices and medications, whilst fast-track approvals is pushing up Biotech stocks. Telemedicine and Healthcare Trackers continue to enjoy fast adoption rates due to social distancing and new US insurance policies covering such services. Our Indxx benchmark has shown solid gains over the past 3years, up 17.0% annualised returns.

Past performance is no guarantee of future performance

Source of all data: HANetf, Bloomberg. Data as of 30.11.2020

 

HAN-GINS Indxx Healthcare Innovation UCITS ETF – Performance

Total Return NAV to Date (up to 30/11/2020)

 

1M

3M

6M

YTD

12M

Since Inception

HAN-GINS Indxx Healthcare Innovation UCITS ETF (Acc)

6.71%

3.42%

13.68%

20.57%

21.53%

33.96%

Indxx Advanced Life Sciences & Smart Healthcare Thematic Indxx (NTR)

6.77%

3.57%

13.98%

21.41%

22.43%

35.69%

 

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 30/11/20

 

Industry News

The Biden administration is set to unleash significant government spending across the healthcare sector – focused on addressing the inequality of healthcare provision across the US. The adoption of far more digitally enabled healthcare services covering medical records and telemedicine will be rolled out throughout 2021. This will boost the need for healthcare and cloud computing to collaborate far more closely in delivering better healthcare, including remote medical services.  Already there is evidence of fast-tracking big cloud computing and cybersecurity spending amongst hospitals and other medical providers. This will help ensure high quality access to healthcare across the US and ultimately globally.

COVID is driving health systems to transform and innovate. The private US healthcare system is embracing virtual/remote care offerings which will increase in the coming decade. The global Telemedicine market size is projected to reach $185.7bn by 2026, a CAGR of 23.5% forecast.[1] Frost & Sullivan forecasts a sevenfold growth in telehealth by 2025 – a five-year compound annual growth rate of 38.2%.[2]

For illustrative purposes only. Source: AmWell, June 2020

 

Constituent News

Our healthcare ETF currently has 107 constituents, with the US country weighting dominating at 80.45%. It is followed by Japan (5.45%), Switzerland (3.46%), China (2.65%) and the UK (2.28%).  Medical devices remain the largest subtheme in the WELL ETF with a 58.69% weighting, followed by Biological Engineering at 22.57% (includes Biotech). The leading contributors to WELL’s performance continued to be from these two subthemes, although Gene Sequencing has been playing an increasingly important role given its rerating during the COVID pandemic. 

Inari Medical has been added to the portfolio in the September IPO Review.  While Livongo Health has merged with Teladoc Health and has been delisted.

Increasingly smaller cap players are amongst WELL’s leading contributors. The rerating of healthcare innovation stocks is expected to continue under a Biden presidency as additional government spending on healthcare is projected.  In particular innovations in healthcare will be receiving additional funds under Biden.

WELL is likely to benefit from the mainstreaming of new innovations in the medical space – with more corporate activity expected.  Healthcare Trackers, Telemedicine and Biotech are amongst those subthemes garnering much more demand and likely to continue to benefit from healthcare innovation efforts in 2021.  Fast adoption rates of remote tracker devices will speed up the provision of effective remote medical services.

Constituent Contribution: Top Contributors - November 2020

Company Name

Sub-Themes

Contribution to Fund

Return

Edwards Lifesciences

Medical Devices

0.75%

17.02%

Medtronic Plc

Medical Devices

0.58%

13.06%

Agilent Technologies, Inc.

Biological Engineering

0.47%

14.51%

Illumina, Inc.

Medical Devices

0.46%

10.04%

Intuitive Surgical Inc.

Biological Engineering

0.39%

8.84%

Zimmer Biomet Holdings

Medical Devices

0.38%

12.88%

Align Technology Inc.

Neuroscience

0.31%

12.96%

ResMed Inc.

Medical Devices

0.30%

9.20%

Olympus Corp.

Medical Devices

0.30%

13.74%

GW Pharmaceuticals

Biological Engineering

0.25%

55.63%

 

Sub-Theme Contribution:

Sub-theme

October

Weight on close

(30/11/2020)

Medical Devices

4.77%

58.69%

Biological Engineering

0.54%

22.57%

Robotics

0.40%

5.12%

Neuroscience

-0.02%

6.14%

Genome Sequencing

0.93%

6.12%

Bioinformatics

0.17%

0.27%

Healthcare Trackers

0.12%

1.08%

 

Top 10 Holdings:

Company

 

Weight

Intuitive Surgical Inc

5.03%

Medtronic PLC

4.96%

Edwards Lifesciences Corp

4.83%

Agilent Technologies Inc

3.86%

Align Technology Inc

3.74%

Boston Scientific Corp

3.73%

Biogen Inc

3.65%

Illumina Inc

3.58%

Regeneron Pharmaceuticals Inc

3.34%

Zimmer Biomet Holdings Inc

3.31%

 


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

IE00BJQ848

EUR

Acc

SIX

WELL SW

WELL.S

IE00BJQ848

EUR

Acc

 

Download our Healthcare Innovation Monthly Report here.

 

 

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