The Pacer BioThreat Strategy ETF (VIRS) is an outperforming healthcare sector-related exchange traded fund that has benefited from exposure to areas outside of the healthcare solutions category.
Over the past month, the Pacer BioThreat Strategy ETF advanced 6.2%. In comparison, the S&P 500 Health Care Sector gained 1.7%, and the Nasdaq Biotechnology Index fell 2.7% over the same period.
The Pacer BioThreat Strategy ETF seeks to provide investors exposure to companies that, in their everyday operations, provide their goods and services to the market when a biothreat is present, such as a pandemic, through one of the following themes: Research of Current and Future Pandemics, Combatting Biological Warfare, Biological Threat Detection, Homeland Security, Disaster Relief Supply Storage, Food and Water Safety and Security, and Work and Live from Home Technology.
Sean O’Hara, President of Pacer ETFs Distributors, explained that VIRS is outperforming by not focusing exclusively on the Health Care solution only.
“We built an Index with LifeSci that includes Vaccine and Therapeutic and testing, but goes deeper than that,” O’Hara said in an email.
VIRS tries to reflect the performance of the LifeSci BioThreat Strategy Index, which includes companies helping to endure biological threats like those offering goods or services to help individuals, organizations, businesses, and governments adapt to requirements for social distancing or remote connectivity, according to the fund prospectus.
These companies may reflect a variety of industries from the provision of consumer staples that may be stockpiled in an emergency to critical healthcare supplies to basic energy resources. A number of companies will be tapped in the value chain as an economy recovers from a biological threat, including those that support the treatment of diseases or responses to chemical or biological attacks.
Furthermore, the Index selects companies based on a proprietary, multi-step research process. The underlying Index conducts fundamental research to identify the most important current and emerging biological threats to human health, which may include pandemic diseases, biological warfare, food, and water safety, environmental safety, and natural disasters.
The Index then utilizes publicly available information such as financial reports and screens, corporate websites, news reports, and interviews with key opinion leaders to identify publicly traded companies that protect against and prepare for recovering from these threats.
Lastly, the index includes those companies with a minimum market capitalization of $1 billion and a minimum average daily value traded for the last six months of at least $2 million. Index components are weighted based on their market capitalization, subject to a maximum weight of 4.9% at the time of rebalancing.
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