Looking To Buy The Dip? 2 ETFs With Biotech, Longevity Focus Off Their Highs
Investing.com | Feb 17, 2022 05:22
Wall Street seems to have eyes only for two things at the moment: the potential next move by the Federal Reserve and geopolitical tensions between Russia and Ukraine. Meanwhile, many stocks and exchange-traded funds (ETFs) have been distressed, losing a significant portion of their market shares.
The Dow Jones Biotechnology Index declined 3.7% in the past 12 months and 9.8% year-to-date. Nonetheless, recent metrics suggest that between 2021 and 2028, the global biotechnology market could grow at a compound annual growth rate (CAGR) of over 15% . Therefore, we can expect stocks in the sector to recover in the coming months and possibly make new highs.
Long-term investors may see this environment as an opportunity for finding better entry points into quality assets.
Today, we introduce two funds that have lost value in recent weeks. Our focus is biotechnology and healthcare names in particular. We believe these sectors deserve to be on watchlists of buy-and-hold investors.
h2 1. VanEck Biotech ETF/h2- Current Price: $159.90
- 52-Week Range: $153.39 - $222.22
- Dividend Yield: 0.25%
- Expense Ratio: 0.35% per year
Our first fund, the VanEck Biotech ETF (NASDAQ:BBH), invests in biotechnology names that mainly develop therapies based on genetic studies. These companies may also work on diagnostic technologies. The fund was first listed in December 2011.
BBH, which tracks the MVIS US Listed Biotech 25 Index, currently has 25 holdings. The leading 10 names comprise about 65% of net assets of $472.3 million.
Get The App
Around 90% of the stocks come from the US. Next are biotechnology names from Ireland, Germany, China, and Switzerland.
Amgen (NASDAQ:AMGN), Gilead Sciences (NASDAQ:GILD), Moderna (NASDAQ:MRNA), Vertex Pharmaceuticals (NASDAQ:VRTX), Regeneron Pharmaceuticals (NASDAQ:REGN), and IQVIA (NYSE:IQV) lead the names in the portfolio.
BBH declined 16.5% in the past 12 months and 14.2% since the start of 2022. Put another way, most of the declines came in the new year. In fact, the ETF had hit a record high in August 2021.
Since then, the fund is down around 28%. Trailing P/E and P/B ratios are 18.54x and 5.58x. Potential investors could consider buying around $155.
h2 2. Hartford Longevity Economy ETF/h2- Current Price: $26.85
- 52-Week Range: $24.19 - $28.36
- Dividend Yield: 2.09%
- Expense Ratio: 0.44% per year
Our next fund is a thematic one with a healthy, long, and prosperous life focus, or the “longevity economy.” Thus, it is not a healthcare pure-play since it invests across several industries.
By 2040, around —the most among any demographic.
Likewise, in Europe, the of people aged 60 or older is forecast to reach $5 trillion by 2030. Wall Street pays attention when we have such strong global growth in population and spending power.
The Hartford Longevity Economy ETF (NYSE:HLGE) invests in companies that could benefit from the buying power of the aging global population. The fund started trading in March 2021.
HLGE currently holds close to 200 companies. The top 10 holdings comprise around 10% of net assets of $25.5 million. In terms of sub-sectors, we see information technology (29%), health care (23%), consumer discretionary (15%), communication services (12%), financials (12%), and consumer staples (4%).
Health benefits giants Anthem (NYSE:ANTM) and UnitedHealth Group (NYSE:UNH); consumer technology name HP (NYSE:HPQ), pharmaceutical group AbbVie (NYSE:ABBV), electronic data storage provider Seagate Technology (NASDAQ:STX); and Alphabet (NASDAQ:GOOGL) are among the leading names on the roster.
HLGE hit an all-time high on Jan. 4, 2022. However, since then, the fund has lost over 5.3%. Nonetheless, since its inception almost a year ago, the ETF is still up about 8.2%.
P/E and P/B ratios are 15.0x and 3.1x. We like the diversity of funds, which deserves further due diligence.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.