The Principal Healthcare ETF Thriving under Vaccine Progress

The Principal Healthcare Innovators Index ETF (Nasdaq: BTEC) is an example of an exchange traded fund that’s been sensitive to coronavirus vaccine headlines. While there’s a lot to like about the Principal ETF from a long-term perspective, vaccine news could again emerge as a pivotal near-term factor for the fund.

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.

“The lead developers of Covid-19 vaccines are rolling up their sleeves to seek emergency use authorizations from the government. Pfizer expects to make its submission to the U.S. Food and Drug Administration in the second half of November, for the vaccine it developed with Germany’s BioNTech,” reports Bill Alpert for Barron’s. “On Monday, Moderna’s chief executive said the company is aiming for a filing before December. If their data look good, the FDA is expected to act within weeks.”

Novembers Updates for BTEC

This batch of news is vital because many of the companies involved in the COVID-19 vaccine competition, including some BTEC member firms, are in advanced stages of trials, meaning the imminent updates are pivotal to forecasting when a vaccine will be fit for human consumption.

BTEC YTD Performance

“At a Wall Street Journal online conference Monday, Moderna chief Stéphane Bancel said the biotech company believes it will have conclusive results from its vaccine’s Phase 3 trial in late November,” according to Barron’s. “That won’t be far behind Pfizer. Both companies are heeding the FDA’s request that they conduct two months of safety surveillance on at least half of the participants in their trials, before seeking the FDA’s authorization.”

With its positioning at the cusp of healthcare innovation, a theme being spotlighted by the COVID-19 pandemic, BTEC is proving youthful healthcare investments can be served. BTEC, which turns four years old in August, “seeks to tap into the increasing demand for healthcare solutions as demographic trends have driven healthcare spending to more than double in the last 20 years,” according to Principal.

“The Pfizer and Moderna vaccines seem well in the lead of other Covid programs. AstraZeneca (AZN)’s clinical trial has been paused since September in the U.S., after a participant in the U.K. came down ill. More recently, Johnson & Johnson (JNJ) put its trial on pause,” according to Barron’s.

Moderna’s progress is relevant for BTEC investors because the stock is the largest component in the Principal ETF.

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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.