With a global healthcare crisis leading to a worldwide financial crisis, investors are looking to disruptive companies that can benefit in times of uncertainty and volatility. These types of funds can be found in areas where the impact of Coronavirus corresponds to the solutions being developed by medical and tech-based companies.
ETF Trends spoke to Simon Barnett, Genomics Analyst for ARK Investment Management, about this subject and how some of its ETFs have been well positioned given their tilt to disruptive innovation within its funds.
Barnett said genomic focused companies have done the best in this current environment, adding that these companies have had exposure to many of the potential solutions to solving the Coronavirus crisis.
As an investing play in the space, the ARK Genomic Revolution ETF (ARKG) has rallied in the past two months due to its exposure to genomics and healthcare.
Barnett said virtual care and telemedicine are critical to helping people maintain access to healthcare while not exposing themselves to infection. It’s been a trend that’s held for the past five years, but it has clearly been brought up to the forefront, showing how exceptional virtual care can be, making people more comfortable with the idea.
Barnett also pointed out the change in people’s habits in regards to seeing medical professionals in person, noting it’s dangerous for high-risk people to have tests done in hospitals. Hence, more comprehensive diagnostic assessments that can be done at home are gaining traction.
A Growth Period
When asked about potential growth, Barnett explained how the notion of virtual care and telemedicine is still in an infancy stage. It has single-digit percent adoption, thus far, across the healthcare sector. There’s essentially a supply and demand gap that is only getting worse between patient and clinician.
“We think there’s a vast majority of inpatient procedures and check-ins that can be done through virtual care,” Barnett states. “That would mitigate some of those supply and demand gaps, especially in rural areas.”
Generally speaking, Barnett notes how these accounts are sticking, it’s just a matter of the population adjusting. Once they do, the benefits are pretty readily apparent.
Thinking about the compounding effect from the general thesis on genetic diagnostics, whether they be predisposition or in a more acute clinical scenario, all of that information is fed through HIPPA-compliant electronic health records. So, it’s the combination of information that’s going up on the cloud and integrating it with patients facing virtual care, and in 3-5 years, it will be something more than the sum of its parts.
Another ARK Invest ETF that’s been gaining attention is the ARK Next Generation Internet ETF (ARKW), which is another fund that has performed in recent months. That has to do with much of the populace working remotely, allowing software services (AI, cloud computing, etc.) to be more heavily relied upon.
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