Technology will lead the next wave of healthcare evolution
JHere is an emerging intersection between healthcare and technology, with the evolution of the former largely dependent on the latter.
For investors who want exposure to this theme without the burden of stock selection, some exchange-traded funds operate at the intersection of healthcare and technology. However, this is an area where selectivity is important, and active management can provide benefits.
Enter the Goldman Sachs Future Health Care Equity ETF (GDOC). GDOC, which debuted last November, could prove to be in the right place at the right time for long-term healthcare investors looking to capitalize on the next wave of tech-driven growth in this sector. .
“We are now at a critical inflection point. Rapidly accelerating innovation means more than delivering vaccines in record time. It is reshaping the entire healthcare industry. Over the past few decades, cost curves have dropped dramatically and breakthrough new treatments have become commercially scalable, prompting the industry to change the way it treats patients by shifting the focus from reactive medicine to preventive medicine” , noted Goldman Sachs Asset Management (GSAM).
GDOC owns 55 shares, and while funds of this nature are generally concentrated, active management allows GDOC to spread its wings a bit. The Goldman Sachs ETF offers exposure to commodity biotech and pharma companies as well as growing genomics and medical device names, among others.
This scope brings GDOC to compelling themes with attractive long-term avenues such as digital health and accuracy, to name a couple.
“At the convergence of data science and laboratory science is precision medicine, the development of personalized treatments and therapies based on a patient’s genetic makeup or other molecular or cellular analyses,” said added GSAM. “Precision medicine can broaden the horizon of therapies available to patients, such as targeted oncology and gene and cell therapy. This has important implications for the treatment of rare diseases, which affect approximately 30 million people in the United States alone.
Another area on the GDOC list with long-term potential is genomics. These names are out of fashion today due to falling growth stocks, but against a backdrop of falling costs, the future is bright for this sector of the healthcare industry.
“When the first human genome was sequenced in 1999, the process took about four years and cost around $0.5 billion. Today it costs around $600 and can be done in just one day,” GSAM concluded. “Genomics, the science of reading, analyzing and editing genomes, has experienced rapid expansion and development since its inception. This creates an opportunity to expand our knowledge of new treatments and cures.
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