The ERSX ETF: Biotech Gains Without the Stock-Picking Pains

The combination of small size and biotechnology equities is alluring, but stock-picking in this arena has been historically difficult. The ERShares International Equity ETF (NYSEARCA: ERSX) is an ideal place to turn for investors seeking exposure to smaller genomics stocks without the commitment of a dedicated healthcare fund.

ERSX selects the most entrepreneurial, primarily Non-US Small Cap companies, that meet the thresholds embedded in their proprietary Entrepreneur Factor (EF). ERShares’ ETF delivers strong performance across a variety of investment strategies without disrupting investors’ underlying risk profile metrics. Their geographic diversity enables them to harness global advantages through additional returns associated with currency fluctuations, strategic geographic allocations, comparative trade imbalances, and relative supply/demand strengths.

Biotech companies and genomics such as Crispr, Intellia, Twist Biosciences, Veracyte, and Editas have more than quadrupled year-to-date, providing a significant tailwind to ERSX.

ERSX YTD Performance

ERShares founder Joel Shulman “suggests that investors should focus on Small Cap biotechs. He notes the exceptional returns, both YTD and MTD on names such as Twist Bioscience, CRISPR, Intellia, Editas, among others and believes strong performance will continue through the remainder of 2020 and early into 2021,” according to the issuer.

A Great 2020 and a Bright Outlook for ERSX

Rising government funds for research on genomics drives the growth of the single-cell genomics market. The government funding focuses on efforts to resolve the complexity of the human genome, the genomic basis of human health and disease, and assurances that genomics is used safely to enhance patient care and benefit society through government, public, and private institutions.

Some ERSX genomics holdings 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, and pharmaceuticals; and enhancing our quality of life.

“The genomic revolution hasn’t even been fully realized yet and many healthcare applications not even yet been discovered. The U.S. is projected to spend over $4T on healthcare in 2020. As a percent of GDP, healthcare spending is projected to continue to grow to nearly one-fifth of GDP by 2030. The genomic revolution has a huge market opportunity to capture,” notes Seeking Alpha.

ERSX has the right mix to capitalize on growth trends that are still in their early innings.

“Entrepreneurial companies pivoted at the right time to help smooth the hardships brought by the pandemic and helped accelerate the transition of the marketplace from traditional suppliers to the new disruptive, innovative economy,” adds ERShares.

For more on entrepreneurial strategies, visit our Entrepreneur ETF 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.