There are some investment niches where active management can benefit investors and biotechnology. Genomics is one such industry and the ARK Genomic Revolution Multi-Sector Fund (CBOE: ARKG) stands out as a prime example.
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 upward trajectory, with lower gene sequencing costs aiding the long-term benefits for related investments. Importantly, ARKG is at the epicenter of emerging, disruptive technologies in the healthcare universe.
“Health care [will see] the convergence of DNA sequencing, artificial intelligence, and CRISPR gene editing—all new technologies that have fallen enough in cost and price and are ready for prime time now,” said ARK Invest's Cathie Wood in an interview with Barron's.
Genomics Promises a Different Future for Healthcare
Genomics companies try to better understand how biological information is collected, processed and applied by reducing guesswork and enhancing precision; restructuring health care, agriculture, pharmaceuticals, and enhancing our quality of life.
Every living organism, including viruses, has its own set of genomes and because a virus like COVID-19 has genetic sequencing, some companies residing in ARKG are relevant when it comes to combating the respiratory illness.
“We think we’re headed into another golden age for health care. Genentech launched the biotech revolution in the ’80s, and we had 20 years of rising returns on investments in health care. They became super stocks. That’s about to happen again,” said Wood in the Barron's interview.
There are also COVID-19 implications for some ARKG components.
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.
“We own various parts of the ecosystem leading up to the vaccine. Moderna [MRNA] gets all the headlines, but there’s room for many. In the ARK Genomic Revolution [ARKG] portfolio, we own a vaccine company called Arcturus Therapeutics [ARCT] that uses the self-replicating MRNA,” notes Wood to Barron's.
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