The pharmaceuticals industry got a boost last year when a Covid-19 vaccine was introduced, but artificial intelligence (AI) could keep the sector and ETFs like the VanEck Vectors Pharmaceutical ETF (PPH) going.
AI technology is making its way into a number of industries, including pharmaceuticals. With transformative solutions like AI paving the way for reduced costs and improved therapies, the sky’s the limit for the pharma industry.
“The search for novel therapies has long been a trial-and-error process that costs drug companies a vast amount of time and money,” a Pharmaceutical Technology article said. “Now, with artificial intelligence (AI) set to transform the pharmaceutical industry more than any other emerging technology, a growing number of pharma and biotech groups are harnessing the cutting-edge tech to minimise the hit-and-miss nature of R&D and discover new therapies with previously impossible speed and accuracy.”
PPH seeks to replicate as closely as possible the price and yield performance of the MVIS® US Listed Pharmaceutical 25 Index. The index includes common stocks and depositary receipts of U.S. exchange-listed companies in the pharmaceutical industry, which includes medium-capitalization companies and foreign companies that are listed on a U.S. exchange.
Overall, PPH gives investors access to:
- Highly Liquid Companies: The index seeks to track the most liquid companies in the industry based on market capitalization and trading volume.
- Industry Leaders: The index methodology favors the largest companies in the industry.
- A Global Scope: The portfolio may include both domestic and U.S.-listed foreign companies, allowing for enhanced industry representation.
The PPH ETF is beating the MSCI ACWI Pharmaceuticals index by 5% lead so far in 2021. PPH also helps minimize concentration risk as the largest of its 24 holdings do not exceed 5.45% of the fund’s assets as of May 30.
Pfizer at the Forefront of AI
Pfizer is one of PPH’s top holdings, which gained much fanfare with its vaccine development in 2020. The company is also in the forefront of using AI to power its operations.
“Pfizer has been on the headlines quite often recently,” the article said further. “The Covid-19 vaccine is what made the company atop other field competitors. Remarkably, Pfizer has also yielded the benefit of US$900 million in the first quarter of 2021, thanks to its vaccine production and distribution programs. But behind the vaccine making and circulation, disruptive technologies played a big role in finding the correct drug and helped the company in its trials. Pfizer has effectively used artificial intelligence to conduct vaccine trials and streamline the distribution.”
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