WELL ETF: Lessons learnt during Coronavirus crisis will fuel growth in the healthcare innovation sector. Anthony Ginsberg, Co-creator of the HAN-GINs Indxx Healthcare Innovation ETF (WELL) says the Coronavirus crisis has exposed many flaws in the US and other healthcare systems, which has proven a boost for innovative healthcare companies …
The crisis has highlighted the benefits of streamlined regulation and innovation in areas such as telemedicine and digital health technologies.
The WELL ETF creator said: “Tech companies will play a bigger role in meeting the need for greater transparency of data and individual electronic health records. Trends to watch include accelerated development of The Individual Patient Record, as health-care companies build data registries. Also, the use of wearables and other consumer-facing technology may increase post-pandemic, integrating data from these devices with individual medical records.”
The HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL) is a UCITS compliant Exchange Traded Fund which is listed on the LSE, XETRA, SIX and Borsa Italiana. It tracks the Indxx Advanced Life Sciences & Smart Healthcare Thematic Index (Net Total Return), an index designed to measure the performance of large, mid and small-capitalisation companies primarily listed on an exchange in Developed and Emerging Markets that are involved in the Advanced Life Sciences & Smart Healthcare sector. The WELL fund saw growth of 23.98% in the last 3 months, and for the last 12 months it has increased in value by 18.77%. WELL’s NAV reached an all-time high of $9.41 on Friday 3rd July (Source: Bloomberg).
WELL underwent a re-balance on Tuesday 20th June with 10 new additions and 5 deletions. The new additions represent a diverse group covering the following subthemes – Genome Sequencing, Biological Engineering, Robotics, Healthcare Trackers, Medical Devices, Neuroscience and Bioinformatics.
Medical devices remain the largest subtheme in the WELL ETF with a 54% weighting – followed by Biological Engineering (25%), Neuroscience (7%), Genome Sequencing (6%) and Robotics (5%).
Key themes in the healthcare sector:
Ginsberg has identified several key themes that will support further growth in the healthcare innovation sector:
Medical device and product manufacturers
Supply constraints are providing a boon to medical device and product manufacturers, particularly those focused on PPE & devices related to the pandemic (e.g., gloves, masks, respirators.
Telehealth / Virtual care
Companies providing virtual services are becoming the standard of care in this environment as providers are limiting in-person visits to acute, emergency cases.
Companies providing in-home care have seen volume increase as self-quarantine becomes more pervasive across the country and the globe.
He says that before COVID-19, usage of telehealth services was estimated to be in the single digits in the US – largely in the areas of mental health. However, according to a survey from IMS Health (US healthcare data provider) – telehealth services used by clinicians surged past 50% in April.
Also, US Government Medicare insurance (reimbursement) rules have already broadened to include various telehealth services. This ensures Medicare insurance will pay for virtual care now. Post-COVID, analysts expect hospitals to shift a larger volume of patient care to telehealth.
Anthony Ginsberg said “Digital health technologies could see accelerated adoption. Digital pharmacies could deliver opportunities for investors, and major e-commerce companies will likely speed up entry into the health-care marketplace.”
In summary, the WELL ETF founder says key future Healthcare changes that will fuel growth in innovative Healthtech companies include:
- An explosion of telehealth visits
- Remote inpatient consults and family visits
- Online scheduling and the automation of patient triage
- Artificial intelligence to allocate resources and make clinical decisions
- Supporting remote work and communication for team members
- Mobilizing teams to create PPE (equipment)
- Ensuring connectivity at remote COVID-19 testing sites and expanding capacity