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Profit from the Genomics Market Momentum With These ETFs

Sweta Jaiswal, FRM

The healthcare landscape has been benefitting from advancements in genomics which is helping to understand the function, structure, evolution, editing and mapping of genomes. The global genomics market is being favored by a streak of solid developments in sequencing, microarray, PCR (Polymerase Chain Reaction), Nucleic acid extraction and Purification techniques. Also, the implications of AI, cloud-based technologies and increased R&D focus are lending a competitive edge to the companies with significant exposure to genomics.

The latest developments in the genomics space highlight its role in making diagnostic tests for the coronavirus. In this regard, GlaxoSmithKline’s GSK consumer products division has recently partnered with Mammoth Biosciences to develop a new CRISPR (Clustered Regularly Interspaced Short Palindromic Repeats)-based at-home COVID-19 test which would be fast, hand-held and fully disposable (per a FierceBiotech report). Moreover, the FDA has also awarded an emergency COVID-19 authorization to Sherlock Biosciences’ CRISPR-based, high-throughput lab test (per a FierceBiotech report).

Factors Supporting the Genomics Market

The application of human genomics studies across several public health programs like population screening and consumer wellness programs might create new opportunities. Notably, programs like these mainly aim at enhancing preventive care for common chronic diseases such as cancer and heart disease, per a Grand View Research report.

Moreover, with the support of new technologies the market is seeing decreasing sequencing costs and widening genomics-based applications. The genomics market is also seeing a ramp-up in government spending with a huge number of start-ups entering the market. Partnerships between research institutes and companies are also opening up new growth opportunities in the global genomics market.

Tremendous progress is being observed within the gene editing space as well.  Given the growing applications of gene-editing, it is a rising market which offers endless opportunities. In fact, going by a Zion Market Research report, the $3.7-billion global genome editing market of 2018 is expected to reach $9.66 billion by 2025, at a CAGR of 14.7%.

ETFs to Gain From the Momentum

It appears like growing demand for personalized medicine, solid investments and higher R&D activities can make genomics the next big thing in the investing space. In fact, going by a MarketsandMarkets report, the $18.9-billion global genomics market is expected to reach $35.7 billion by 2024 at a CAGR of 13.5%. The report further states that North America accounted for the largest share of the global genomics market in 2018.

In such a scenario, we highlight a host of ETFs that investors can keep tabs on:

ARK Genomic Revolution ETF ARKG

ARKG is an actively managed ETF that seeks long-term growth of capital by investing under normal circumstances primarily (at least 80% of its assets) in domestic and foreign equity securities of companies across multiple sectors, including health care, information technology, materials, energy and consumer discretionary, that are relevant to the Fund’s investment theme of the genomics revolution. The fund holds 37 stocks in its basket and has 0.75% in expense ratio. It has accumulated $1.03 billion in its asset base (read: First-Mover Pandemic Disease Fight ETF On The Way).

Invesco Dynamic Biotechnology & Genome ETF PBE

This fund follows the Dynamic Biotech & Genome Intellidex Index. The index comprises companies that are majorly engaged in the research, development, manufacturing and marketing plus distribution of various biotechnological products, services and processes and companies that gain significantly from scientific and technological advances in biotechnology and genetic engineering and research. The fund holds 30 stocks in its basket. It has managed $243.7 million in its asset base. Expense ratio comes in at 0.57% (read: Biotech ETFs to Gain From Latest Advancements in Cancer Drugs).

Global X Genomics & Biotechnology ETF GNOM

This is a new entrant in the space having accumulated $33.1 million since its inception on Apr 5, 2019. It seeks to invest in companies that potentially stand to benefit from further advancements in the field of genomic science, such as companies involved in gene editing, genomic sequencing, genetic medicine/therapy, computational genomics and biotechnology. The product follows the Solactive Genomics Index, charging 68 bps in annual fees. It holds 41 stocks in its basket.

iShares Genomics Immunology and Healthcare ETF IDNA

This is another new entrant, which was launched in June 2019. Tracking the NYSE FactSet Global Genomics and Immuno Biopharma Index, the fund provides exposure to developed and emerging market companies that could gain from long-term growth and innovation in genomics, immunology and bioengineering. Holding a basket of 47 securities, the fund has an AUM of $90.3 million. It charges a fee of 47 basis points (read: Is Moderna Winning the COVID-19 Vaccine Race? ETFs to Gain).

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GlaxoSmithKline plc (GSK) : Free Stock Analysis Report
 
Invesco Dynamic Biotechnology Genome ETF (PBE): ETF Research Reports
 
ARK Genomic Revolution ETF (ARKG): ETF Research Reports
 
Global X Genomics Biotechnology ETF (GNOM): ETF Research Reports
 
iShares Genomics Immunology and Healthcare ETF (IDNA): ETF Research Reports
 
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