Not to be a Debbie Downer but coronavirus (and its variants) are not going away anytime soon. Check out the stats: according to Johns Hopkins University, there are 110 million cases worldwide. Tragically, over 2 million global citizens have died due to complications from the virus. The fragility of human mortality is increasing, which of course is fueling the race to the COVID cure. Simultaneously, experts are saying the “pandemic” is quickly becoming an “endemic.” Investors are channeling their inner Jerry McGuires, and pouring dollars into biotech R&D. As such, TrackStar activity sees financial advisors focusing on the healthcare space in search of opportunities. On December 11, we focused on oncology names that were populating the top searches for FAs. Today, we will take a look at a Chinese healthcare ETF that is finding itself in the spotlight.
This week, the KranShares MSCI All China Healthcare Index (KURE) is seeing the second biggest surge in ETF searches by “All Financial Analysts” according to TrackStar data. KURE tracks an index of large- and mid-cap publicly issued shares of Chinese companies in the healthcare sector. Chinese companies represent 56.6% of the weighting while Hong Kong companies make up 42.6%. The fund focuses on pharmaceuticals which are 52.8% of the weighting but also has representation in Healthcare Equipment (17.6%), Biotechnology (15.5%). Healthcare Providers (9.8%) and Food & Drug Retailers (3.8%).
Since its inception in February of 2018, KURE has provided steady returns to investors. The ETF is up 15% over the past month and 34% since breaking out above $35 resistance in mid-December. This corresponds with the December 11 Advisors in Focus when we highlighted the move in oncology plays following the American Association for Cancer Research Breast Cancer Symposium. The ETF has a manageable Expense Ratio of 0.65%. Valuation is frothy at 67x P/E but most ETFs and stocks are trading above historical norms.
Here are some highlights of research surges* this week which includes an ESG, energy, and of course, a Chinese healthcare ETF:
|RANK||TOP ETFS – BY ALL FAs (Surge Traffic) This Week||Ticker||TOP STOCKS- BY ALL FAs (Surge Traffic) This Week||Ticker||TOP INDUSTRIES BY ALL FAs (Surge Traffic) This Week||TOP ETF CATEGORIES BY ALL FAs (Surge Traffic) This Week|
|1||Invesco S&P MidCap 400 Pure Value ETF||RFV||Corning Inc||GLW||State commercial banks||Small Cap Value Equities|
|2||KraneShares MSCI All China Health Care Index ETF||KURE||Natera Inc||NTRA||Broadcasting – Radio||Mortgage Backed Securities|
|3||iShares MSCI Canada ETF||EWC||Alset Ehome Intl Inc||AEI||Animal specialties, misc||Metals|
|4||Invesco S&P 500 Equal Weight Technology ETF||RYT||Bionomics Ltd.||BNOEF||Lodging||Hedge Fund|
|5||iShares MSCI USA ESG Select ETF||SUSA||Ptc Therapeutics||PTCT||Tobacco||Inverse Equities|
|6||ProShares UltraShort S&P 500||SDS||Socket Mobile||SCKT||Mortgage Finance||Preferred Stock/Convertible Bonds|
|7||Quadratic Interest Rate Volatility and Inflation Hedge ETF||IVOL||Biomarin Pharmaceuticals||BMRN||Auto & Truck Dealerships||Preferred Stock/Convertible Bonds|
|8||iShares Core S&P Small-Cap ETF||IJR||Sociedad Quimica Y Minera S.A.||SQM||Uranium||Leveraged Real Estate|
|9||Renaissance International IPO ETF||IPOS||Strongbridge Bio Ord||SBBP||Publishing||Leveraged Bonds|
|10||WisdomTree US LargeCap Dividend ETF||DLN||Alnylam Pharmaceuticals||ALNY||Insurance Brokers||Leveraged Commodities|
|11||Columbia Research Enhanced Value ETF||REVS||Pyxis Tankers||PXS||Electronic Components||Real Estate|
|12||Invesco BulletShares 2023 Municipal Bond ETF||BSMN||Washington Prime Group Inc||WPG||Grocery Stores||MLPs|
|13||iShares MSCI Hong Kong ETF||EWH||Bluebird Bio||BLUE||Wholesale-Machinery, Equipment & Supplies||Oil & Gas|
|14||Amplify Seymour Cannabis ETF||CNBS||Bluefly Inc||BFLY||Discount Stores||International Government Bonds|
|15||ProShares Ultra Short Oil & Gas||DUG||NeoMedia Technologies, Inc.||NEOM||Education & Training Services||Inverse Commodities|
|16||SPDR S&P Oil & Gas Exploration & Production ETF||XOP||Frontline Ltd||FRO||Insurance – Property & Casualty||Mid Cap Growth Equities|
|17||Schwab US Dividend Equity ETF||SCHD||Artius Acquisition Inc Cl A||AACQ||Integrated Freight & Logistics||Government Bonds|
|18||Fidelity MSCI Utilities Index ETF||FUTY||Magna International||MGA||Medical Distribution||Alternative Energy Equities|
|19||First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund||GRID||Alj Regional Hold||ALJJ||Leisure||Leveraged Volatility|
|20||WisdomTree US MidCap Earnings ETF||EZM||Caredx Inc||CDNA||Computer Hardware||Diversified Portfolio|
What makes KURE interesting? Drugs, baby. The ETF includes WuXi Biologics (WXIBF), an integrated technology platform for drug development, which has an 8.7% weighting in the fund; Jiangsu Henrgrui Medicine, which is traded in China and is a pharma company engaged in sales of healthcare products; Shenzhen Mindray, which development of household products and medical equipment; WuXi AppTec, which manufacturers small molecule drugs and cell gene therapies; Aier Eye Hospital Group, which provides ophthalmologica: services; and BeiGene (BGNE), a commercial-stage biopharma that develops molecularly targeted and immuno-oncology drug candidates.
Speaking of drugs, BeiGene is the only ADR of the group. It trades under the symbol BGNE. With many of the oncology names, this stock has upward momentum. It’s been up 176% in the past year, running 63% since early December alone. This morning, BGNE announced the United States Food and Drug Administration accepted a supplemental new drug application for BRUKINSA. Some details: this is for the treatment of adult patients with Waldenstrom’s Macroglobulinemia, a rare indolent B-cell lymphoma that occurs in less than two percent of patients with non-Hodgkin’s lymphoma. A PDUFA date has been set for April 18, 2021. BGNE is seeing a sell-the-news reaction to the headline as it tumbles from $380 to the $360 area, setting up a test of its 20-day moving average.
Want more? Check out these healthcare names garnering the attention of financial advisors according to our search data:
- Natera, inc (NTRA), #2 in Top Stocks by All FAs (surge traffic)- NTRA Is a cell-free DNA testing company that provides preconception and prenatal genetic testing services by drawing blood from the mother. This morning, NTRA announced a partnership in collaboration with Personalis (PSNL) for treatment monitoring and molecular residual disease. The stock is seeing profit-taking this morning as it slips back from $125 resistance. NTRA has a $9/6 billion market cap with a float of 82 million shares.
- PTC Therapeutics (PTCT); #5 in Top Stocks by All FAs (surge traffic)- A biopharmaceutical company that focuses on the development of medicines for the treatment of rare disorders such as Duchenne muscular dystrophy. PTCT will present its fourth-quarter earnings on February 25. Investors have been closely watching to see signs of when the company believes it will be able to breakeven. T. Rowe Price, Fidelity, and RTW Investments all recently filed 13Gs showing 5% ownership. Bank of America downgraded PTCT to Neutral from Buy on February 12. PTCT is down approximately 18% after hitting all-time highs ($70.82) on January 8.
- Biomarin Pharmaceuticals (BMRN); #7 in Top Stocks by All FAs (surge traffic)- BMRN commercializes therapies for people with serious, life-threatening diseases and medical conditions. Shares of BMRN were decimated back on August 21 when the company received a Complete Response Letter (meaning the company had to go back to the drawing board re: data) from the FDA for its Valoctocogene Roxaparvovec Gene Therapy for severe Hemophilia. This would have been the first approved hemophilia A gene therapy. BMRN shares fell from $120 to $80 in reaction to the news. Shares have settled down and are climbing higher, riding the 50-day moving average. BMRN reports results on February 25th where investors will be looking for an update on its ValRox therapy.
So where does this leave us re: healthcare spending? “To the moon” as the Redditors say. U.S. households allocate on average 8.1% of spending on healthcare in 2018 an increase of 5.9% in 2004 according to BLS. Healthcare spending increased 4.5% in 2019, reaching $3.8 trillion or $11,582 per person. As long as these trends continue, financial advisors will remain focused on healthcare, and we’ll be right here to deliver the goods.