Healthcare Is Getting Innovative and That Important for Investors

Innovation and technological disruption are permeating in the healthcare sector. One way to play that trend is with the Robo Global Healthcare Technology and Innovation ETF (HTEC).

HTEC, which is a year old, seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the ROBO Global Healthcare Technology and Innovation Index.

Disruptive technology is not relegated to certain sectors as it will permeate into all industries in some form or fashion. For example, augmented reality is technology comprised of digital images superimposed over the real world, and its use is primed to drive industry growth–industries like real estate and manufacturing are already putting the technology to use in a variety of ways.

“Michael Venuto — co-founder and CIO of Toroso Asset Management — said he thinks investors should look at ‘megatrends that were occurring before this virus situation that has now been accelerated,’ including online retail, the gig economy, and healthcare technology,” reports Business Insider.

HTEC Has The Goods

HTEC holdings are analyzed by factors representing levels of revenue a company receives from innovative healthcare technologies, as well as technology and market leadership within the healthcare technology space, resulting in a so-called HTEC Score.

The coronavirus pandemic put healthcare exchange-traded funds (ETFs) in the forefront as medical providers are an essential component in the global market landscape. However, investors shouldn’t suck up any and all health care ETFs in sight like a robotic vacuum because not all are created equal.

According to Robo Global, the developments in robotics, machine intelligence, and life sciences has enabled breakthrough advances in the healthcare industry from AI-powered diagnostic to minimally invasive robotic surgery, from molecular analysis to DNA sequencing and genetic cancer therapies, from 3D-printed implants to virtual care visits.

Compared to traditional market cap-weighted benchmarks like the Global Healthcare Index, HTEC is more overweight healthcare equipment and supplies, biotechnology, life sciences tools, healthcare technology, and technology hardware companies, so the fund is less focused on areas like pharmaceuticals, equipment, supplies, providers, and services.

“For healthcare technology, Venuto recommends the Robo Global Healthcare Technology and Innovation ETF (HTEC), which has 85 holdings including Livongo Health, Abiomed, and Quidel,” according to Business Insider.

For more on disruptive technologies, visit our Disruptive Technology Channel.

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.