Coronavirus Vaccine Competition Proves Meaningful for This ETF

The Principal Healthcare Innovators Index ETF (Nasdaq: BTEC) is one of this year’s most impressive stories among the up-and-coming industry ETFs and the race to develop a coronavirus vaccine is a prime reason why BTEC is soaring.

BTEC tracks the Nasdaq U.S. Healthcare Innovators Index, which is designed to provide exposure to early-stage small-capitalization healthcare companies. These are primarily biotechnology and life science, which have the potential to create cures for cancer, develop new medical technologies, or spearhead other medical advances.

Moderna, one of the highest-flying biotechnology stocks this year, is one of the leaders in the coronavirus vaccine clubhouse and that’s meaningful for BTEC because the stock is one of the fund’s top 10 holdings.

“There are more than 1,039 COVID-19 potential drugs and 2,737 clinical trials for COVID-19 globally, with more than 430 of these being run in the US, despite the pandemic causing disruptions in clinical trials,” according to GlobalData.

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Since the coronavirus outbreak, health care technology has come to the fore with various innovations to combat the virus. This can only help fuel health care technology exchange-traded funds (ETFs) moving forward from preventative medicine to treatment.

BTEC’s telemedicine exposure is rewarding in the coronavirus environment, but it has vast long-term growth potential. However, BTEC has long-ranging utility, meaning its moment isn’t going to end when Covid-19 is vanquished. The ETF’s focus on research and development-intensive companies, something many basic rivals lack, sets it up well for the long-term.

Data confirm that Covid-19 clinical trials are taking off in the U.S. and could be catalysts for BTEC moving forward.

“The number of clinical trials in the US has surpassed the number of trials in China. It is unclear how many of the 690 (13%) trial sites attached to currently planned trials in China will be able to be initiated, as China now reports very few cases of COVID-19, creating a limited pool of patients on whom to test interventions,” according to GlobalData.

Clinical trials are vital at a time when the U.S. is experiencing a massive uptick in coronavirus cases.

“The US is currently seeing the highest number of confirmed COVID-19 cases since the pandemic began, with spikes in Florida, California, Arizona, and Texas. The highest numbers of site disruptions are found in California, Florida, Texas, and New York, where the pandemic initially hit the hardest,” notes GlobalData.

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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.