This article was originally published on ETFTrends.com.
The pandemic is not only fueling healthcare services but is also spurring innovation in the way care is delivered. Startup opportunities in healthcare innovation, in particular, can boost certain exchange-traded funds (ETFs).
“The novel coronavirus pandemic has upended the world as we know it, taking an unprecedented toll on health and human life,” a MedCity News article noted. “The healthcare ecosystem has quickly mobilized to mitigate the crisis – modifying care access points and modalities while producing financing mechanisms to sustain patient care amidst dire circumstances.”
“As the scale of the pandemic grows and downstream impacts persist, healthcare organizations are recognizing they must shift from a reactive stance to a more proactive ‘new normal,’” the article added. “Operating in this environment will require new capabilities, forcing many organizations to look externally for innovative solutions to guide this transformation.”
For broad exposure to healthcare, ETF investors may want to look at the Health Care Select Sector SPDR ETF (NYSEArca: XLV) and the Vanguard Health Care ETF (NYSEArca: VHT), which comprise two of the biggest in the sector.
^IXHC data by YCharts
Capitalizing on Healthcare Innovation via ETFs
Investors who want to take advantage of the innovations in health care and look to funds like the Principal Healthcare Innovators Index ETF (BTEC). BTEC seeks to provide investment results that closely correspond, before expenses, to the performance of the Nasdaq Healthcare Innovators Index.
Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies that compose the index at the time of purchase. The index uses a quantitative model designed to identify equity securities in the Nasdaq US Benchmark Index (including growth and value stock) that are small and medium capitalization U.S. healthcare companies.
Another fund to consider is the Robo Global Healthcare Technology and Innovation ETF (HTEC). HTEC seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the ROBO Global Healthcare Technology and Innovation Index.
The fund will normally invest at least 80 percent of its total assets in securities of the index or in depositary receipts representing securities of the index. The index is designed to measure the performance of companies that have a portion of their business and revenue derived from the field of healthcare technology, and the potential to grow within this space through innovation and market adoption of such companies, products, and services.
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