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Healthcare Innovation Monthly Report | March

  • Healthcare is a big beneficiary of Biden’s $1.9 trillion stimulus plan being passed in Congress[1]       
  • Huge US government healthcare insurance plans are boosting virtual/digital adoption rates.[2]       
  • Healthcare to represent 30% of all IoT devices.[3]        
  • Cloud Computing usage exceeding 20% CAGR through 2024.[4]

 

Healthcare Innovation ETF (WELL) Returns

February

12 Month*

-0.64%

35.48%

Past performance is no guarantee of future performance. Source: Bloomberg, Solactive, HANetf * 12 Month figures based on 29.02.20 - 28.02.21.

 

Performance Review

HAN-GINS Indxx Healthcare Innovation ETF (WELL) lost 0.64% in February, but it is still posting a 35.48% gain over 12 months.  

The leading subtheme contributors to these gains continues to be in Medical Devices (up 1.1%) followed by Genome Sequencing, Neuroscience, Healthcare Trackers and Biological Engineering (Biotech).  They represent all of the 10 best performing holdings in February.  For 2021 to date, Neuroscience’s best performers are led by Prothena (up 85.9%) and Omeros Corp (39.6%). 

The largest February contributors to WELL’s return is led by the following five medical device companies: Boston Scientific, Olympus Corp, DexCom, Medtronic PLC and Align Technology.  Illumina, the Gene Sequencing leader, and Biotech firm GW Pharma were also top 10 standouts.  Biden’s huge $1.9 trillion stimulus will boost healthcare spending including traditional medical device leaders.[5]  Fast-track adoption of digital medical services will continue to boost gene editing and remote medicine – driving 2021 gains in Trackers and Telemedicine.  [6]

 

Company Name

Sub-Themes

January (Contribution to Return)

Prothena Corp. Plc

Neuroscience

99.11%

GW Pharmaceuticals PLC ADR

Biological Engineering

40.52%

LivaNova Plc

Medical Devices

23.28%

Zepp Health Corporation ADR Class A

Healthcare Trackers

20.57%

InMode Ltd.

Medical Devices

17.16%

Olympus Corp.

Medical Devices

15.98%

Luminex Corp

Medical Devices

15.77%

Nektar Therapeutics

Biological Engineering

15.18%

Demant A/S

Medical Devices

14.91%

Lantheus Holdings Inc

Medical Devices

14.81%

Past performance is no guarantee of future performance. Source: INDXX. Data as of 28.02.2021

 

 

1M

3M

6M

YTD

12M

SI

HAN-GINS Indxx Healthcare Innovation

-0.64%

6.45%

10.08%

0.39%

35.48%

42.60%

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

-0.61%

6.50%

10.30%

0.40%

36.31%

44.51%

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 / HANetf. Data as of 28/2/2021

 

Industry News

Cost inefficiencies and COVID demands is forcing global healthcare systems to innovate. Often this means fast-tracking digital health solutions.

Massive cost overruns in the giant US Medicare & Medicaid programs means Healthcare comprises 20% of US GDP - rising further as Baby Boomers age.[7]

Cloud-based hospital spending is enjoying a boom - enabling new health-tech products and services.[8],[9]

Gene Sequencing and Biotech are increasingly mainstream for healthcare solutions such as vaccines.  This has led to a rerating of holdings in these areas.[10]

Remote Wearables/Trackers and Telemedicine are experiencing a huge surge due to private and government insurance now covering such procedures.  Telemedicine is on track to grow by over 30% annualised between 2021-2025.[11]

New Healthtech products and services are benefiting from the growth of Machine Learning (ML), and the Cloud/Internet of Things (IoT).   These key areas of growth include:

  • Digital medical devices        
  • Cloud-based healthcare (includes remote monitoring, telemedicine, wearables)        
  • Genomics Editing/Sequencing        
  • AI and deep learning

 

Constituent News

WELL currently has 108 constituents, with the US country weighting at 81.6%. It is followed by Japan (4.8%), Switzerland (3.4%), China (2.9%) and the UK (2.4%).  Medical devices are the largest subtheme in the Healthcare innovation ETF with a 58.5% weighting, followed by Biological Engineering at 21.6% (includes Biotech), Genome Sequencing (7.5%), Neuroscience (6.6%) and Robotics (4.9%). The leading contributors to WELL’s performance included two Neuroscience firms – Biogen and Neurocrine Biosciences (see table). 

A number of midcap holdings are amongst WELL’s leading contributors.  Subthemes that contributed most to this month’s performance are:  Biological Engineering (Biotech), Genome Sequencing and Neuroscience.

These subthemes are expected to benefit from significant increased US government healthcare spending under a Biden presidency.  Faster adoption rates of digital healthcare due to COVID – continue to boost WELL’s holdings in the device and biotech areas.

 

Outlook

Big Tech and medical innovations are disrupting the healthcare sector, with Telemedicine, Wearables, Gene Editing and AI the most obvious examples.

Key trends include:

  • New Tech speeding up diagnoses, treatment and access.        
  • Genetic analysis & Big Data developing Precision Medicine.        
  • Adoption of AI & Cloud/Internet of Things (IoT) - making hospitals smarter.[12]        
  • Cloud Healthcare CAGR 23% through 2024[13]        
  • AI helps pandemic detection, vaccine development, thermal screening, facial recognition & analyzing CT scans.       
  • Digitization transforming data, diagnostics, surgical workflows, remote patient monitoring.[14]        
  • Telemedicine boom >$200bn by 2025.[15]        
  • Wearables - increasingly use for temperature, glucose level & blood pressure monitoring.[16]        
  • Healthcare likely to represent 30% of market share for IoT devices. (see above for source)        
  • Blockchain - from Clinical Trials, to Healthcare Billing to secure electronic medical records, remote patient monitoring, pharmaceutical supply chain, and health insurance claims.[17]

For illustrative purposes only. Past performance is no guarantee of future performance. Source: https://www.businesswire.com/news/home/20200130005458/en/Global-Healthcare-Cloud-Computing-Market-2020-2024-Introduction-of-Blockchain-in-Cloud-Computing-to-Boost-the-Market-Growth-Technavio

 

Product Details

HAN-GINS Indxx Healthcare Innovation 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.

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