The Global X Telemedicine & Digital Health ETF (EDOC) is one of the stars in this year’s crop of new exchange traded funds. While COVID is pushing the short-term narrative, EDOC boasts bullish long-term prospects too.
The Global X Telemedicine & Digital Health ETF (EDOC) seeks to invest in companies positioned to benefit from further advances in the field of telemedicine and digital health. This includes companies involved in Telemedicine, Health Care Analytics, Connected Health Care Devices, and Administrative Digitization.
Indeed, the pandemic is speeding adoption of digital health and telemedicine concepts, but the long-term growth trajectory confirms EDOC will be useful for investors long after the virus is vanquished.
“According to RBC, the digital health market is worth $27 billion today and is expected to reach $92 billion in 2025, creating tremendous opportunities for all types of players in the space,” reports Business Insider.
A Revolution in Healthcare is Brewing
As economies look to re-open, the wildcard will remain Covid-19. Workarounds for social distancing have become an integral part of health care services.
Plus, the telemedicine industry is attracting some big names.
“The cash balances at the big technology companies are now at record levels and record levels of private investment flowing into new start-ups has increased the capital targeting the digital adaptation,” notes RBC. “That should serve to accelerate the shift in healthcare while at the same time introducing a new class of healthcare tech companies to the market.”
EDOC can benefit from the increasing trends towards a more digitized world. The Coronavirus pandemic provided a booster shot to the telemedicine and digital health sector. Now there’s high growth potential.
EDOC has access to dozens of companies with high exposure to the telemedicine & digital health theme. As far as its underlying indexing criteria, the fund connects physicians and patients digitally, facilitating a range of medical activities that include diagnosis, treatment, and medication management, as well as offering online pharmaceutical services, and/or providing internet healthcare platforms (“Telemedicine”).
“Despite a traditionally higher tech valuation over healthcare, big tech companies have seen P/E expansion of >60% over the last two years and now an ~87% premium to healthcare which has remained flat — we believe the increasingly ‘tech-like’ attributes of these emerging healthcare companies could catalyze similar significant multiple expansion ahead,” notes RBC.
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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.