One of the primary advantages of the ALPS Disruptive Technologies ETF (CBOE: DTEC) is that it’s one of the few ETFs that provides exposure to multiple fast-growing themes.
Among the 10 themes, DTEC provides exposure to is healthcare innovation, which is getting a significant lift owing to the coronavirus pandemic. Part of that exposure includes the booming telemedicine theme and that put some DTEC components in play for consolidation.
“Teladoc Health Inc.’s $18.5 billion merger with Livongo Health Inc. is likely to spark further M&A activity in virtual care and telemedicine as the coronavirus pandemic continues to push patients and providers online,” reports S&P Global Market Intelligence.
Intersecting Themes
Making DTEC all the more compelling is its broad thematic exposure, which provides an intersection with healthcare innovation via several other of the 10 themes in the ETF.
Robotics, artificial intelligence and healthcare innovations are catalysts bringing swift changes across the healthcare industry. ETF investors who are interested in the changing field of medicine can look to DTEC to gain diversified exposure to an innovative healthcare industry.
Healthcare spending made up 18% of U.S. GDP, and it is rising. Looking ahead, by 2020, it is projected that global healthcare spending could shoot up to $8.7 trillion as the industry faces increased challenges from an aging population, rising costs, shortage of skilled workers, dealing with legacy IT, invasive procedures, and medical errors.
However, the future of healthcare looks more technologically driven as the industry shifts into the digital age from old analog equipment, developing early detection and prevention, with robotics or artificially assisted technicians.
DTEC’s exposure to artificial intelligence, a fast-growing theme in its own right, is important on a standalone basis, but also relevant to the fund’s healthcare innovation allocations.
AI’s utility in the healthcare arena is already on display as it’s being deployed in the fight against COVID-19. A team in Boston Children’s Hospital is implementing machine learning to sift through copious amounts of online news, including social posts, news reports, data from official public health channels, and information supplied by doctors to track the coronavirus.
Other technology funds to consider include the Technology Select Sector SPDR ETF (NYSEArca: XLK) and the Fidelity MSCI Information Technology Index ETF (FTEC).
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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.
