How a TD-ETF takes advantage of the broader growth in healthcare


    While life science tools companies have benefited from increased demand for COVID-19 pandemic tests and diagnostics, and companies like Moderna, BioNTech and Pfizer have pioneered vaccine development, other names have suffered. For example, medical technology companies that make things like pacemakers, artificial heart valves, and surgical robots have been injured because people just stopped going to the hospital like they used to. However, we saw that this industry began to recover in 2021.

    Aeta said: “Much has been said about how the COVID-19 pandemic has accelerated growth in the industry. While this may apply to certain areas of health care, such as mRNA vaccines; Overall, the acceleration of growth has really taken more than 20 years, with decades of investments in several industries finally reaching commercial maturity in recent years, from genomics to intelligent medical devices. “

    He stated that while healthcare awareness has undoubtedly increased, the judging panel has yet to determine whether events over the past 18 months will cause treatments to get to market faster. This is because COVID-19 pandemic vaccines not only benefited from extensive government funding, clinical trial phases are running in parallel, the approval routes have been accelerated and we were simply lucky that the SARS-CoV-2 spike protein is an effective target, that helped in more rapid development of a vaccine compared to the much more complicated task of developing personalized cancer vaccines, which is one of the primary goals of mRNA technology in the future.

    Focus on 3Ds of healthcare

    With a broader perspective than just the COVID-19 pandemic, the ETF is targeting what Aeta calls the 3Ds of healthcare: the companies discover Medication companies development Widgets and the company deliver Services.

    The first bucket Discover drugs, encompasses pharmaceutical and biotech companies and encompasses innovations in antibody-based therapies, traditional small molecule drugs, and emerging gene and cell therapies, with mRNA vaccines at the fore during the pandemic. One benefit of exiting the ETF is that all names in the ETF are capped at 2%. While some of these mega-cap pharma names have many innovations, they are subject to expiring drug patents for their existing portfolio, which limits their growth rate. This feature allows more large to mid-cap companies to get exposure within the ETF, which can offer more long-term growth potential.


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