Penn Wealth Publishing

2021.01.10 Penn Wealth Report Vol 9 Issue 01

Issue link:

Contents of this Issue


Page 17 of 35

18 penn wealth Report volume 9 issue 01 10 Jan 2021 Penn Wealth Report Copyright 2021. All Rights Reserved. investment intelligence ETF Spotlight ARK Genomic Revolution ETF From gene editing to molecular diagnostics to agricultural biology, genomics will revolutionize the health care industry. The ARK Genomic Revolution ETF ARKG $80 is designed to take advantage of the incredible advances occurring in the gene therapy arena. How much potential exists in this cutting-edge corner of the health care sector? e company which manages the fund projects a 43% annual growth rate for genomics over the coming years. Admittedly, our favorite equity style is mid-cap growth. is grouping consists of a large number of dynamic companies between $2 billion and $10 billion in size just waiting to break out and become large caps. is fund has a weighted average market cap of $7.2 billion—right in the center of the sweet spot. As an example, ARKG's top holding is Invitae Corp NVTA $51 , a $9 billion diagnostics and research company. Specifically, Invitae operates as a genetic information company, offering tests for disorders in the hereditary cancer, neurological, cardiovascu- lar, and pediatric arenas. Revenues at the firm have increased along a strong trajectory, growing from $1.6M in 2014 to $212M last year. NVTA holds a 9% position in the ETF. e second-largest position, coming in with an 8% weighting, is CRISPR erapeutics CRSP $132 , a pure biotech operating as a gene-editing company. CRISPR refers to a technology designed to find a specific bit of DNA inside of a cell, then alter that piece of DNA for a host of purposes. For example, scientists have used CRISPR to identify genes from cancer-causing viruses, then modify, correct, or delete specific areas of the genes to remove the threat. An array of sub-fields under the genomics header. To be sure, ARKG is a concentrated ETF which carries more risk (beta 1.5) due to the nature of the fund's objective. However, the 47 or so companies in the basket hail from an array of sub-fields: • CRISPR: As outlined above. • Targeted erapeutics: A type of cancer treat- ment using drugs to target specific genes and proteins involved in the growth and survival of cancer cells. • Bioinformatics: e application of computational technology to review and manipulate the enormous amount of information related to molecular biology. • Molecular Diagnostics: A collection of techniques used to analyze biological markers in an individual's genetic code. • Stem Cells Research & erapy: e use of stem cells to test new drugs for safety and efficacy. e generation of health cells to replace diseased cells (regenerative medicine). One final area of focus for the fund is agricultural biology. is discipline deals with the development of genetic, physi- ological, and biochemical bases of pathogens and immunity in plants and animals. We mentioned the relatively high beta of this fund, but we didn't mention the flip-side of that equation. Alpha measures a fund's performance against its benchmark, with "1" being the baseline. ARKG has a 3-year alpha of 36.34. ARKG is a member of the Penn New Frontier Fund, a strategy designed to take advan- tage of emerging technologies. e contents of this report reflect the personal views, opinions, and research of Penn Wealth Publishing. While measures are taken to help assure the accuracy of data, no guarantees can be made and the firm is not liable for any losses incurred by subscribers. is is not a solicitation to buy. Always consult your investment professional before investing any money. ARKG@$80

Articles in this issue

Archives of this issue

view archives of Penn Wealth Publishing - 2021.01.10 Penn Wealth Report Vol 9 Issue 01