Among ETFs focusing on disruptive themes, the ARK Genomic Revolution Multi-Sector Fund (CBOE: ARKG) is rarely short of compelling catalysts.
ARKG includes companies that merge healthcare with technology and capitalize on the revolution in genomic sequencing. These companies try to better understand how biological information is collected, processed and applied by reducing guesswork and enhancing precision; restructuring health care, agriculture, pharmaceuticals, and enhancing our quality of life.
In fact, the high-flying, actively managed ARKG seemingly acquires new avenues for potential upside on a regular basis. Add polygenic risk scores (PRS) to the list.
“In contrast, polygenic risk scores (PRS) surface thousands of common variants scattered throughout the genome. While weak individually, a cumulative score of the small, genetic ‘nudges’ can be a powerful tool to assess an individual’s predisposition to disease,” according to ARK Invest Research.
Long-Term Growth Ahead
Bolstering the long-term case for genetic sequencing is the field’s ability to help healthcare professionals more accurately diagnose ailments, delivering a higher level of personalized patient care.
ARKG is also one of the best-performing equity-based actively managed ETFs on the market and a leading health care ETF over the past several years. Active management is a nice benefit as it allows ARKG managers to tilt holdings toward PRS plays at a time when few if any, ETFs offer comparable exposure.
“Despite their potential, clinicians have not embraced PRS. Unlike PRS, monogenic risk tests have enjoyed widespread clinical acceptance, thanks to an established body of evidence and standardized variant interpretations. In contrast, PRS have weaker predictive capability, particularly for people of non-European ancestry, patient types not included in earlier PRS studies,” notes ARK Invest.
Genomics companies try to better understand how biological information is collected, processed and applied by reducing guesswork and enhancing precision; restructuring health care, agriculture, pharmaceuticals and enhancing our quality of life. Importantly for ARKG investors, PRS technologies are on the cusps of more prominent roles in the healthcare industry.
“Recently, however, studies focused on both monogenic risk and PRS offered results that seemed to be more than the sum of their parts,” says ARK. “One particularly rigorous paper concluded that: (a) PRS altered the total disease risk assessment meaningfully for patients with dangerous monogenic variants, and (b) for patients who have inherited a monogenic risk variant, including a polygenic assessment increased the accuracy of the risk assessment.”
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.