ETF Securities (ETFS) today unveiled Australia’s first exchange-traded fund (ETF) with a pure focus on and exposure to biotechnology, a sub-sector of healthcare.
The ETFS S&P Biotech ETF (CURE) tracks the S&P Biotechnology Select Industry Index and specifically looks at the United States biotechnology industry.
The fund currently holds 123 stocks, 70 per cent of which are small caps or mid-caps.
It charges a management expense ratio of 0.45 per cent.
ETFS Australia chief executive Kris Walesby said the investment case for biotechnology is a compelling one for local investors.
“Biotechnology is a highly complex field, which at its most basic level refers to technologies that utilise biological processes,” Walesby said.
“At the cutting edge of today, we now have the capabilities to edit specific DNA sequences, with research looking to use this technology to cure genetic diseases right at the source.
“The scope of this industry is far-reaching and, for the average investor, very difficult to comprehend.”
He said historical performance revealed biotechnology has been viewed as a high-risk, high-reward investment.
“The success of a newly patented treatment can see enormous returns, which conversely the failure of a drug to gain FDA (Food and Drug Administration) approval or the launch of a superior treatment can quickly lead to a swift downturn in the revenue and performance of a biotech company,” he noted.
“For this reason, ETFS is launching the new fund.”