With scientists racing to find a vaccine for the coronavirus, health care, and biotechnology have been hot sectors this year. Yet, as investors try and pick a winner from the rapidly increasing group of companies that are entering the competition, a collection of biotechnology and other, more targeted exchange-traded funds that contain some of the key names in the vaccine race are delivering impressive returns.
Genomic funds are some of the shining stars in the collection of stellar health care ETF performers. At the start of the year, the genomics industry was already on a rapid trajectory with lower gene sequencing costs aiding the long-term benefits for related investments.
Moderna is one of the biggest stories in the biotechnology space this year because the company is one of the leading contenders to bring a coronavirus vaccine to market. The stock soared recently on news that its Covid-19 vaccine is making progress faster than many expected, but then quickly slumped due to uncertainty over the value of its findings.
A host of healthcare behemoths such as J&J and Pfizer are also working on feverishly to generate vaccines. Some of these will be potential aides will be available for testing this fall but for not for mass consumption globally until next year.
For investors looking to use ETFs to invest in genomics, there are several to choose from.
The ARK Genomic Revolution ETF (ARKQ) is a standout choice in the genomics space, with a year-to-date gain of almost 48%, which includes a recent string of all-time highs.
ARKG is also one of the best-performing equity-based actively managed ETFs on the market and a leading health care ETF over the past several years. Active management is a nice benefit as it allows ARKG managers to tilt holdings toward coronavirus vaccine plays.
“Genomic sequencing is changing the way biological information is collected, processed, and applied. ARKG is focused on the disruptive innovations that are increasing precision, restructuring health care, agriculture, pharmaceuticals, and enhancing the quality of life,” according to ARK Investment Management.
The Franklin Genomic Advancements ETF (HELX) is a recent addition to the genomics ETF space, entering the party earlier this year. HELX is actively managed like ARKG, and its returns are significant, with the fund gaining 25% since its inception.
HELX holds 55 stocks with a weighted average market capitalization of $21.69 billion, which are limited to 4.70% allocations, and has easily bested the key stock indexes this year so far.
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