Investors looking for sector-level innovation beyond the technology realm don’t need to stretch into unfamiliar territory — healthcare is prime territory for disruptive growth concepts.
Several exchange traded funds provide access to the new era of healthcare innovation, including the WisdomTree BioRevolution Fund (WDNA). WDNA, which debuted earlier this year, tracks the WisdomTree BioRevolution Index (WTDNA).
While WDNA is just a few months old, investors may want to consider overlooking the fund’s rookie status and not wait for others to embrace the fund because healthcare innovation arrives quickly and is evolving on an almost daily basis. That is to say, when it comes to healthcare disruption, it’s better that investors arrive early to the party rather than late or not at all.
“Call it the Industrial Revolution for healthcare, the century of biology, Moore’s Law for medicine, or all three. Whatever metaphor you choose, the meaning is the same: Thanks to our rapidly evolving understanding of biology and the application of new technological tools—and a bit of urgency sparked by the Covid pandemic—explosive change is coming in our ability to diagnose, treat, and even cure many debilitating diseases,” reports Lauren Rublin for Barron’s.
Investors that are already familiar with the concept of healthcare innovation know that stock picking in this arena is difficult, and many of the biotechnology and genomics revolution names in this space are smaller stocks beholden to regulatory approvals with reputations for volatility.
WDNA mitigates some of the turbulence in multiple ways. For starters, the WisdomTree ETF eliminates concentration risk by not allocating more than 1.93% of its weight to any of its 113 holdings. Secondly, while WDNA provides considerable exposure to innovative healthcare names, it’s not dedicated to those potentially volatile stocks. The fund takes some of the edge off with allocations to blue-chip pharmaceuticals equities such as AstraZeneca (NYSE:AZN) and Pfizer (NYSE:PFE), among others.
Another benefit to WDNA is its exposure to vaccine developers, several of which were involved in this pursuit long before COVID-19 was around. Some WDNA member firms were developing vaccines on various fronts long before coronavirus vaccines became headline-grabbers.
“The uptake of vaccines is going to be much greater as new vaccines are developed, especially if we get the holy grail: rolling treatments for RSV [respiratory syncytial virus], PIV3 [parainfluenza virus type 3], Covid, flu, hMPV [human metapneumovirus], all this stuff, into one shot,” said T. Rowe Price’s Ziad Bakri in an interview with Barron’s. “I am extremely bullish on vaccines. They are another form of preventive medicine, which is always the best way to treat disease.”
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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.