ETF of the Week: ARK Genomic Revolution Multi-Sector Fund (ARKG)

ETF Trends publisher Tom Lydon discussed the ARK Genomic Revolution Multi-Sector Fund (ARKGon this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.

  • Drug stocks are also getting the Trump bump
  • Drug maker stocks rallied after President Donald Trump vowed to end “global freeloading” that put American medicine manufacturers at a disadvantage
  • President Donald Trump backing biotech space
    • In line with President Trump’s “America Patients First” rhetoric
    • Trump plans to lessen drug prices in a way that doesn’t appear to threaten drugmakers
    • Said the administration plans to lower prescription drug prices and pledge to end global freeloading that has allowed foreign buyers to pay less for drugs
    • Trump argued that Americans, through higher drug prices at home, are basically subsidizing the “enormous cost of research and development” for the benefit of other countries, which are able to acquire the same drugs for cheap.
    • “In some cases, medicine that costs a few dollars in a foreign country costs hundreds of dollars in America for the same pill, with the same ingredients, in the same package, made in the same plant,” Trump said.
    • Trump also wants the government to cut down “regulatory burdens so drugs can be gotten to the market quicker and cheaper.”
  • Innovation will continue to support future growth
    • For example, the investment opportunity found in the Clustered Regularly Interspaced Short Palindromic Repeats, or CRISPR, genome-editing platform.
      • CRISPR is a genome-editing platform that will address the world’s most salient health issues. It is like a ‘molecular swiss army knife’ with a rapidly expanding number of tools that perform different functions
      • Research shows the number of human genomes sequenced is expected to surge to 170 million by 2022 from 422,000 back in 2016.
      • Meanwhile, costs could decline to $100 per genome sequenced from the thousands of dollars it costs now.
      • Additionally, the cost of CRISPR, or “editing” DNA, is also falling , along with its time-to-manufacture, which could accelerate the pace of further innovation in the space.
  • ARK Genomic Revolution Multi-Sector Fund
    • Actively managed
    • a thematic multi-capitalization exposure to innovative elements that cover advancements in gene therapy bio-informatics, bio-inspired computing, molecular medicine, and pharmaceutical innovations.
    • sub-sectors like Gene Therapy (21.3%), Targeted Therapeutics (17.7%), Beyond DNA (15.6%), Bioinformatics (13.7%), Instrumentation (13.5%), Molecular Diagnostics (8.9%), Next Generation Oncology (6.7%), Stem Cells (1.7%) and Agricultural Biology (<1%).
    • Top holdings include Intellia Therapeutics 10.5%, Illumina 7.8%, Editas Medicine 6.9%, Invitae Corp 6.6%, Celegene 3.8% and Bluebird Bio 3.6%.

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