All around the world, economic superpowers are vying to be the first to develop a vaccine for Covid-19. China is an obvious contender given that the country was the epicenter of the virus and their success, if attained, could help boost certain exchange-traded funds (ETFs).
Speaking to those ETFs, in particular, biotechnology-focused funds could stand to benefit. However, one certain fund gives investors a China-specific focus on their potential to create a vaccine–enter the Global X China Biotech Innovation ETF (CHB).
CHB seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive China Biotech Innovation Index. The fund invests at least 80% of its total assets, plus borrowings for investments purposes (if any), in the securities of the underlying index and in American Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”) based on the securities in the underlying index.
The underlying index is designed to provide exposure to exchange-listed companies that are directly involved in China’s biotechnology industry. How close is the industry in creating a Covid-19 vaccine?
A recent report by ABC News could help shed some light on that:
“China is rapidly increasing the number of people receiving its experimental coronavirus vaccines, with a city offering one to the general public and a biotech company providing another free to students going abroad,” the report said. “The city of Jiaxing, south of Shanghai, is offering a vaccine under development by Sinovac, it said in an announcement Thursday. It said high-risk groups, including people who are “responsible for the basic operations of the city” will receive priority, but that residents who have emergency needs can also sign up.”
As far as the progress is going for the vaccine, the report said it’s coming down to the wire.
“The vaccine is in the final stage of clinical testing, but has not yet been approved. The city government said it is being provided under an emergency authorization,” the report added. “China National Biotech Group, another Chinese vaccine company, is offering its vaccine free to students who study abroad in a strategy health experts say raises safety and ethical concerns.”
For investors who want general biotech exposure without getting country-specific , there’s the iShares Nasdaq Biotechnology ETF (IBB). IBB seeks to track the investment results of the NASDAQ Biotechnology Index, which contains securities of companies listed on NASDAQ that are classified according to the Industry Classification Benchmark as either biotechnology or pharmaceuticals and that also meet other eligibility criteria determined by Nasdaq, Inc.
For more market trends, visit ETF Trends.