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  • Industry Spotlight
  • disruptive innovation
  • genome editing
  • saas

3 genome ETFs to watch in 2021

The Genome investment theme has gained 82.18% over the last year, according to data from our Thematic ETF Screener (as of 11 February). That beats the Cloud Computing (SaaS) and Uranium themes, which have gained just over 62% apiece in the same period. In fact, over the past 12 months, the Genomes theme has seen the fifth-highest returns of the 29 themes tracked by our screener. It sits behind Solar, Disruptive Technology, Lithium and Battery Tech and Cannabis.

More widely, the NASDAQ Biotechnology Index has outperformed both the Nasdaq and S&P 500 over the past year (as of 10 February’s close).

82.18%

Growth of the Genome investment theme over the past 12 months

  

We profile three of the biggest ETFs providing exposure to companies that specialise in genome technology.

 

Ark Genomic Revolution ETF

Ark’s Genomic Revolution ETF [ARKG] gained 180.50% in 2020. According to the ARK ETF Trust Annual Report, a $10,000 investment at the fund's inception on 31 October 2014 would have been worth $28,605 on 31 July 2020, making it one of the best performing ETFs in the sector.

ARKG tracks companies that are expected to benefit from developments and advancements in genomic science and technology. Ultimately, these companies stand to gain from the extension and enhancement of human and other life.

“Genomic sequencing is changing the way biological information is collected, processed, and applied. ARKG is focused on the disruptive innovations that are increasing precision, restructuring health care, agriculture, pharmaceuticals, and enhancing the quality of life,” according to ARK Investment Management.

“Genomic sequencing is changing the way biological information is collected, processed, and applied. ARKG is focused on the disruptive innovations that are increasing precision, restructuring health care, agriculture, pharmaceuticals, and enhancing the quality of life” - ARK Investment Management

 

Top holding Teladoc Health's [TDOC] share price has gained roughly 160% over the past 12 months, and has continued to perform well in 2021. The company specialises in telemedicine and saw demand for its virtual healthcare services spike during the COVID-19 pandemic.

 

Global X Genomics & Biotechnology ETF 

The Global X Genomics & Biotechnology ETF [GNOM] invests in companies involved in genomic science, such as gene editing and genomic sequencing.

Over the past 12 months, the fund has gained 70.98%, and is predominantly made up of US companies (85%), with some exposure to European and Asian companies.

70.98%

Growth of the Global X Genomics & Biotechnology ETF over the past 12 months

  

The top holding is Pacific Biosciences of California [PACB], which manufactures systems for gene sequencing and has seen its share price jump 1,008.7% over the past 12 months (as of 10 February’s close). Second place holding, California-based genetics testing company Natera [NTRA], is another strong performer, having gained 238.45% in the same period.

 

iShares Genomics Immunology and Healthcare ETF

The iShares Genomics Immunology and Healthcare ETF [IDNA] tracks the NYSE FactSet Global Genomics and Immuno Biopharma Index and provides investors with exposure to the full value chain of genomics, immunotherapy and healthcare industries. Unlike the US heavy GNOM, the IDNA includes emerging stocks. It is also something of a coronavirus vaccine play, with Moderna [MRNA] its fifth-largest holding.

Over the past 12 months, the ETF has delivered a 78.48% return, and is up 116.7% since inception in June 2019 (as of 11 February’s close).

IDNA’s top holding is Fate Therapeutics [FATE], a clinical-stage biopharmaceutical company dedicated to the development of next-generation cellular immunotherapies for cancer and immune disorders. Over the past 12 months, Fate’s share price has shot up 208%, and is on an upward trend back to January highs. Second place Beigene [6160.HK], which specialises in cancer treatments, is also trading near its all-time high share price.

“IDNA was the ETF that stood out as the best and closest comparison to ARKG, and potentially the best addition to my portfolio if I wanted to continue to get exposure to the healthcare innovation space without growing my ARKG position” - Michael Remes

 

In his comparison between IDNA and the Ark Genomic Revolution Multi-Sector ETF for Seeking Alpha, Michael Remes writes that, while IDNA hasn’t performed to the same level as the ARKG, it has “significantly outperformed the sector”. Remes notes that the fund adds “diversity in geographic exposure, market cap allocation, and on an individual holding level”.

“IDNA was the ETF that stood out as the best and closest comparison to ARKG, and potentially the best addition to my portfolio if I wanted to continue to get exposure to the healthcare innovation space without growing my ARKG position,” writes Remes on Seeking Alpha.

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

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