Why This Biotech Firm is the Top Weight in ARKG | ETF Trends

You may have missed it over Thanksgiving week, but there’s reason to be excited about at least one biotech firm on the market. Exact Sciences Corp (EXAS) was recently the subject of positive attention from Wall Street analysts, who believe that it could be poised to surge. No innovative biotech ETF has a higher weight for EXAS than the ARK Genomic Revolution ETF (ARKG) at 9%, in which EXAS is the top weighted holding.

It’s been an up and down year for biotech, for sure, with the NASDAQ Biotechnology Index down -10.8% YTD following a difficult start to the year, but recovering some thanks to a 14.5% upswing over the last six months. Goldman Sachs Asset Management is also recommending an overweight for the health care sector in 2023, undergirding the long term worth of biotech exposures.

EXAS, the firm that makes Cologuard, the at home diagnostic test for colorectal cancer, is one source of excitement for analysts into the new year. Based on its price targets as of last week, when it was up 23% over the past four weeks, it still has some notable room to grow behind its solid earnings prospects. EXAS also receives a Zacks Rank #2 as a Buy, in the top 20% of the several thousand stocks Zacks ranks.

ARKG is an ETF that focuses on firms set to disrupt their respective industries with innovation, and holds EXAS at 9%, with a large gap to second-placed Ionis Pharmaceuticals, Inc. (IONS) at 5.5%. The innovative biotech ETF invests in firms set to benefit from advancements in gene editing and therapy as well as molecular diagnostics, the focus area for EXAS.

ARKG charges a 75 basis point fee, with its performance having increased form -16.9% over the last three months to 2.4% over the last one month. The strategy has also added $43 million in net inflows over the last month.

Certainly the rising rate environment looms large over growthier opportunities like biotech, but should the Fed’s impact start to soften in the coming months, there may be a case for investors to increase their exposure to a innovative biotech ETF like ARKG for its focus on disruptive innovation firms like EXAS.

For more news, information, and analysis, visit the Disruptive Technology Channel.