ETF Trends
ETF Trends

Shares of Rosetta Genomcis (NasdaqGS: ROSG), a micro-cap biotechnology stock, are up nearly 32% after earlier trading up as much as 40% after the company landed U.S. and European patent allowances. The news comes less than a week after Rosetta won a patent allowance in Japan.

Rosetta “received a Notice of Allowance from the United States Patent and Trademark Office for a patent claiming the use of miR-34a for the treatment of p53-associated cancers. In addition, the Company announced its first allowance from the European Patent Office for a patent claiming the specific composition for miR-451, a miR relating to the Company’s Cancer of Unknown Primary (CUP) testing franchise,” according to a statement.

Due to its status as a micro-cap stock, Rosetta is not a major holding in notable health care exchange traded funds, but one ETF is getting a lift from today’s Rosetta rally: The ARK Genomic Revolution Multi-Sector Fund (NYSEArca: ARKG). Rosetta is the smallest of ARKG’s 47 holdings, occupying a weight of just 0.35% in the actively managed ETF as of Feb. 17.

However, that is enough exposure to Rosetta to have ARKG trading higher by almost 1.7% on volume that is nearly 50% above the daily average. ARKG is also trading just pennies below its all-time high. The ETF debuted in late October as part of the second pair of ETFs from New York-based ARK Investments.

ARKG is a substantial departure from the health care ETF most investors are accustomed to.

“Securities within ARKG are substantially focused on and are expected to substantially benefit from extending and enhancing the quality of human and other life by incorporating technological and scientific developments, improvements and advancements in genomics into their business. One such way this is accomplished is by offering new products or services that rely on genomic sequencing, analysis, synthesis or instrumentation,” according to ARK.

This is not the first time a health care ETF has been moved by even a slight weight to a biotech or medical device name that experiences a big intraday move. Last year, ETFs with small weights to Intercept Pharmaceuticals (NasdaqGS: ICPT), Puma Biotechnology (NYSE: PBYI) and Idenix Pharmaceuticals, among others, experienced notable one-day moves as various news events launched those stocks higher. [Puma Pumps up Biotech ETFs]

ARKG’s leverage to the pop in Rosetta underscore’s the ability of the fund’s manager to reach across various market cap spectrums. Rosetta currently has a market value of $53.6 million.

To be sure, ARKG is not the run-of-the-mill health care ETF as highlighted by allocations to Monsanto (NYSE: MON), Amazon (NasdaqGS: AMZN) and Qualcomm (NasdaqGS: QCOM) just to name a few companies that rarely, if ever, appear in traditional health care ETFs. [A Look at Unique Health Care, Industrial ETFs]

ARK Genomic Revolution Multi-Sector Fund