The race is on to find a cure for the deadly coronavirus and that competition could benefit some ETFs, including the ARK Genomic Revolution Multi-Sector Fund (CBOE: ARKG).
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.
As an actively managed ETF, ARKG isn’t constrained by an index, a trait that can be advantageous because ARK Invest’s management team isn’t confined to standard biotech names that may not provide adequate leverage to a coronavirus cure.
“Traders are hoping their initiatives to develop treatment and prevention for the coronavirus could come to fruition at some point. Vir Biotechnology surged 111% in the past month, while Novavax gained 91% during the same period,” according to CNBC.
Those two stocks aren’t among ARKG’s holdings, but the fund does feature one of the largest weights to Inovio Pharmaceuticals Inc. (INO), which is a coronavirus play.
“Inovio Pharmaceuticals (INO) traded up 25.5% on (last) Monday following the news that the Coalition for Epidemic Preparedness Innovations (CEPI) granted it $9 million in funding to begin a clinical trial for a vaccine to prevent infection from the Wuhan coronavirus (2019-nCoV),” according to ARK Invest research.
ARKG actively invests in multiple sectors domestically and internationally, including healthcare, information technology, materials, energy and consumer discretionary–all consistent with the investment theme surrounding the genomics revolution–a scientific discipline that focuses on genetics, particularly with regard to studies in DNA.
“We believe shares of Inovio traded down 18% on (last) Tuesday as investors took profits,” notes ARK. “Yesterday (last Thursday), Inovio announced its collaboration with Beijing Advaccine Biotechnology to run parallel clinical trials in the US and in China for the vaccine. ARK believes CEPI’s grant highlights the strength of Inovio’s platform to develop novel immunotherapies for both infectious disease and cancer.”
Since inception in October 2014, the $488 million ARKG has been one of the best-performing biotech ETFs and one of the top-performing healthcare funds, regardless of industry focus.
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