ROBO Global 'HTEC' ETF Focuses on Disruptive Healthcare Industry

Robotics, artificial intelligence and healthcare innovations are catalysts bringing swift changes across the healthcare industry. Exchange traded fund investors who are interested in the changing field of medicine can look to a new tech strategy to gain diversified exposure to an innovative healthcare industry.

In the recent webcast, Investing in Healthcare Tech & Innovation, Jeremie Capron, Director of Research at ROBO Global, and Lisa Chai, Senior Research Analyst for ROBO Global, looked into the rapidly evolving technologies that are quietly and completely morphing the medical field as we know it.

Healthcare spending made up 18% of U.S. GDP, and it is rising. Looking ahead, by 2020, it is projected that global healthcare spending could shoot up to $8.7 trillion as the industry faces increased challenges from an aging population, rising costs, shortage of skilled workers, dealing with legacy IT, invasive procedures and medical errors.

However, the future of healthcare looks more technologically driven as the industry shifts into the digital age from old analog equipment, developing early detection and prevention, with robotics or artificial assisted technicians. For example, ROBO Global pointed out that we may see key applications of artificial intelligence in healthcare, such as AI-powered diagnostics, surgical robots, genomic analysis, new drug discovery, streamlined clinical trials and smart monitoring devices. A.I. in health care could balloon to a $6.6 billion industry by 2021 form the $600 million back in 2014. A.I. funding has almost doubled to $2.3 billion in 2018, compared to $1.2 billion in 2017.

We are already seeing the benefits of advances or innovations in the field of medicine, including urology, spinal and orthopedic surgical robots; nerve regeneration from trauma; breast cancer procedures; 3D-printed orthopedic, dental and cranial implants; and Bluetooth-enabled insulin patches. In the field of genomic research, we are seeing next gen sequencing and array testing; early diagnosis of cancer without colonoscopies; noninvasive and highly accurate organ rejection screens; gene therapy CRISPR, RNAi, and CAR-T.

As a way to help investors better access these innovations in the healthcare industry, ROBO Global launched the new ROBO Global Healthcare Technology and Innovation ETF (HTEC). The ETF is a research driven, modified equal-weight ETF that tries to seek global exposure to best-in-class companies leading the healthcare technology revolution, from robotics & AI to diagnostics, genomics, precision medicine and life sciences.

HTEC tries to reflect the performance of the ROBO Global Healthcare Technology and Innovation Index, which classifies healthcare technologies companies by diagnostic; lap process automation; regenerative medicine; precision medicine; data and analytics; telehealth; robotics; and medical instruments.

Components are then analyzed by factors representing levels of revenue a company receives from innovative healthcare technologies, as well as technology and market leadership within the healthcare technology space, resulting in a so-called HTEC Score.

Compared to traditional market cap-weighted benchmarks like the Global Healthcare Index, HTEC is mroe overweight healthcare equipment and supplies, biotechnology, life sciences tools, healthcare technology and technology hardware companies, so the new ETF is less focused on areas like pharmaceuticals, equipment, supplies, providers and services.

The ETF is “focused on parts of the healthcare value chain where rapid innovation is occurring through recent medical technology,” according to ROBO Global.

Financial advisors who are interested in learning more about health technologies and innovations can watch the webcast here on demand.