2 ETFs meet the requirement for high-growth biotech stocks


A number of healthcare and biotechnology stocks have recently been in the spotlight. Beginning of October, Merck (NYSE ๐Ÿ™‚ โ€“ covered โ€“ gave a positive update on molnupiravir, a potential antiviral drug he was developing with Ridgeback Therapeutics that has shown great results in the treatment of COVID-19. Then came similar news from Pfizer (NYSE ๐Ÿ™‚ regarding Paxlovid, its antiviral drug candidate.

During this time, Johnson & johnson (NYSE ๐Ÿ™‚ announced that it will set up its consumer health division and focus primarily on pharmaceuticals as well as medical devices. And on November 19, the CDC recommended COVID-19 vaccine boosters for all adults in the United States. The ad put BioNTech (NASDAQ :), Modern (NASDAQ :), JNJ and Pfizer stocks on investor radar.

Thus, today we present two exchange-traded funds (ETFs) that focus on names in biotechnology. To put this discussion in context, readers might be interested to know that the return has been 19.1% over the past 12 months. Likewise, the index is up almost 21%.

1. VanEck Biotech ETF

  • Current price: $ 194.04
  • 52 week range: $ 157.17 โ€“ $ 222.22
  • Dividend yield: 0.32%
  • Expense ratio: 0.35% per year

Biotechnology is โ€œthe use of living organisms or their products to improve human health and the environmentโ€. The global biotechnology market is expected to be valued at $ 2,440 billion by 2028, implying a compound annual growth rate (CAGR) of over 15.5% between 2021 and 2028.

The VanEck Biotech FNB (NASDAQ ๐Ÿ™‚ invests in healthcare companies that develop and market drugs based primarily on genetic analysis as well as diagnostic equipment. The fund started trading in December 2011.

BBH, which owns 25 holdings, tracks the MVIS US Listed Biotech 25 Index. The top 10 names represent about 62% of net assets of $ 564.6 million, which makes the fund significant. About 85% of companies are from the United States, followed by Ireland and Germany.

The main titles include Amgen (NASDAQ :), Moderna, IQVIA Holdings (NYSE :), Gilead Sciences (NASDAQ :), ICON (NASDAQ ๐Ÿ™‚ and Vertex pharmaceutical (NASDAQ :).

The fund has returned 21.7% in the last year and 13.2% in 2021. Potential investors looking for a fund focusing on some of the biggest names in biotech might consider investing around $ 190.

2. ETF Global X Genomics & Biotechnology

  • Current price: $ 20.95
  • 52 week range: $ 19.34 โ€“ $ 28.45
  • Expense ratio: 0.50% per year

This fund integrates the dimensions of genomics into the health investment thesis. Genomics is โ€œthe study of an organismโ€™s genome โ€“ its DNA โ€“ and how that information is applied.โ€

This niche market is expected to grow from nearly $ 28 billion in 2021 to nearly $ 95 billion in 2028, implying a CAGR of nearly 19.5%. Health professionals stress the importance of genomic sequencing in the development of an effective global response against the coronavirus.

The Global X Genomics and Biotechnology ETF (NASDAQ ๐Ÿ™‚ gives exposure to companies that are likely to be at the forefront of advancements in genomic science applications, including genomic sequencing, gene editing, genetic medicine as well as biotechnology. The fund was listed for the first time in April 2019.

GNOM weekly chart.

GNOM, which has 41 holdings, tracks the returns of the Solactive Genomics Index. The top 10 stocks represent approximately 42% of net assets of $ 264.3 million.

Some of the big names on the list include Pharmaceutical Biomarine (NASDAQ :), Genscript Biotech (HK ๐Ÿ™‚, Electronic Arrow (NYSE :), Qiagen (NYSE :), Therapeutic Zarephath (NASDAQ ๐Ÿ™‚ and Pacific Biosciences (NASDAQ ๐Ÿ™‚ from California.

GNOM is down about 9.5% in 2021 but has returned 5.1% in the past 12 months. After hitting a record high of $ 28.45 in February, the fundโ€™s companies came under pressure and the ETF lost more than 24% of its value. Buying investors who can handle short-term fluctuations in the fund might want to consider buying around these levels.

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