Add Exposure to the Lucrative Health & Biotech Industry With RYH | ETF Trends

Ultima Genomics has claimed that its first instrument, the UG100, will sequence a human genome for under $100.

The news shocked the life sciences community, as the price to sequence a human genome using Illumina (ILMN) technology essentially plateaued once it crossed the $1,000 barrier in 2014. Lower sequencing costs will be a tailwind to the basic and applied life science industries that are enjoying substantial secular growth, propelling the industry forward in a wave of advances. 

Investors looking to gain access to the lucrative industry should consider the Invesco S&P 500® Equal Weight Health Care ETF (RYH), which offers exposure to the domestic health care industry, including Illumina. 

RHY follows the S&P 500 Health Care Index; however, each sub-industry component is given equal weight. A strategy like this might appeal to investors looking to avoid traditional indexing methodology which typically distributes holdings based on market cap, according to VettaFi

RYH is designed to offer more balanced exposure for the long-term investor since it has the added benefit of avoiding the potentially adverse impact of rallies or crashes in a specific sub-industry within health care.

This strategy skews toward smaller, deeper value companies compared with its average peer in the Health Morningstar Category. Analyzing additional factors, this strategy has exhibited a tilt toward low-volatility stocks, or companies whose shares have a history of lower standard deviation of returns. Such exposure tends to pay off most during periods of market stress, according to Morningstar.

Current holdings, which are equally weighted, include Gilead Sciences (GILD), Pfizer Inc (PFE), Vertex Pharmaceuticals Incorporated (VRTX), Eli Lilly and Company (LLY), Catalent Inc (CTLT), and Viatris, Inc (VTRS). The fund holds 66 securities as of June 8. 

According to Morningstar, the fund has $887 million in assets under management and charges a 40 basis point expense ratio, priced within the cheapest fee quintile among peers, giving it a cost advantage over competitors.

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