Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
For Healthcare Investors, A Medical Breakthrough ETF.
The ticker is SBIO. The ALPS Medical Breakthroughs ETF. It invests in companies that are working on the cutting edge of biotech and other sectors of future healthcare.
SBIO follows the Poliwogg Medical Breakthroughs Index, as volatile a collection of SMIDs as I've ever seen. (You couldn't make this stuff up.) Poliwogg has a new CEF in registration, the Poliwogg Regenerative Medicine Fund, with a target launch date of Jan 15! Anyone thinking bubble?
I was thinking very speculative but only for a tiny percentage of anyone's portfolio. There are some very promising studies and therapies out there. Will this ETF capture more than its share will be the million dollar question.
@Ted wrote posted a note about this ETF at the end of December when it was launched. There's no question it will be volatile but I have been watching it because like you JC I think there will be very big winners in their universe and hopefully not so many losers that its all offset. The biggest concern I had when reading about it was that the rules for their index are limited to companies with market caps less than $5 billion. I think that means some of the really big winners will get knocked out of the index, and the ETF, so quickly that the biggest gains will be missed and you will need a much higher success rate with the companies in the portfolio to offset the failures and deliver exceptional returns.
BBP could be another alternative as noted in the article. I'll check to see if any healthcare or life science funds hold companies like these ETF's do.
The portion of the healthcare sphere that involves robotics, wearables, bionics etc has huge growth potential. For someone with a long time to invest these are the kinds of future stocks that hold a lot of promise.
Two years ago I purchased PSCH which in not all biotech, but includes a big chunk of them in the small cap health care index. Sold it after a nice runup after a year. A safer play I suspect than this new one.
Ugly day for biotech Jan 15 2015, 14:03 ET | By: Douglas W. House, SA News Editor Contact this editor with comments or a news tip Money flow is decidedly negative today for (IBB -2%) (BIB -3.9%) biotech. For whatever reason, there always seems to be a sell-off at the end of the JP Morgan Healthcare Conference. ALPS Medical Breakthroughs ETF Dow Jones SBIO 25.87 -3.36% Real-time: 2:55PM EST https://www.google.com/finance?q=NYSEARCA:SBIO&ei=UBu4VOnFFY6lsQeH1IC4BA
The portion of the healthcare sphere that involves robotics, wearables, bionics etc has huge growth potential. For someone with a long time to invest these are the kinds of future stocks that hold a lot of promise.
@JohnChisum, are you aware of any funds/ETFs/CEFs that focus on these areas?
Here's a question I keep thinking about and asking myself when I consider new healthcare investments: The expense ratios of these "passive" ETFs seems to fall between 50 and 100 basis points whereas Vanguard offers an active fund for only 30 basis points, T Rowe Price's healthcare fund costs 79 basis points and Fidelity's biotech fund costs 75 basis points. Are there any good reasons to go passive when you only have to pay 25 or 30 basis points for someone to be a bit more selective with your money and how to invest it, and especially in cases where the active funds have lower costs than the ETFs?
Express Scripts (ESRX) up today. While people were understandably upset about the Gilead situation (investors and patients) recently, it seems like Express Scripts and other PBM gatekeepers trying to keep costs down are going to continue to be a big factor in the industry. CVS/Caremark (CVS) and Catamaran (CTRX) are other examples.
@LLJB, No, I know of nothing beyond what has been mentioned already. Looking at PRHSX, the Fidelity Biotech fund and JAGLX, they are pretty much the same. Same holdings for the most part. One stock I do know is Ekso but that is on the Nasdaq OTC counter. The share price on that had dropped substantially and has never recovered. Their products and research look very interesting though.
This area is still a wild frontier. I am still checking out some ETFs but everything I have ran into pretty much is a biotech clone of the funds above.
@JohnChisum, thanks! I agree, most of the stuff out there are clones of a handful of different themes in healthcare and I generally feel like many of these newer ETFs are just jumping on the bandwagon with small differences in an attempt to differentiate themselves.
Ekso is pretty interesting. They went public a year ago and there was a huge spike in their price at the end of February that had pretty much all been given back by the end of March. Since then its generally trended lower but with a lot of volatility. In one of their presentations they hold out Cyberdyne and ReWalk as competitors. Cyberdyne is a Japanese company listed only in Frankfurt but they have the highest market cap of all three at something more than $2 billion. ReWalk claims to be the first company in the US to get FDA approval for an exoskeleton last year and they quickly went public after that. I read presentations from both Ekso and Cyberdyne and Ekso seems more interesting but part of that could be the reporting for Cyberdyne stuff must have been done in Japanese and translated to English in some automated way or by someone who isn't really fluent in English. I have yet to read the financial reports for ReWalk but it seems like all 3 are bleeding cash as they're still investing heavily in research & development and/or hiring more people to support growth. Do you know anything about these other guys? Just from a few hours of reading it looks like pretty amazing stuff and Ekso's presentation says there are a lot of people every year with spinal cord injuries who can benefit from this kind of stuff.
I had not known about the other two so thanks. I checked them out. Cyber dyne also submitted their exoskeleton for FDA approval in Nov. of last year. The exoskeleton field is going to be a focus industry I think. Not only are they looking at stroke and paralyzed patient access but also applications for the military. I don't know who came first but I would bet on the military as they have the high budget and many such projects filter down to civilian applications. It is a fascinating field and with the lack of investing opportunity for the average investor, I wonder if this is exclusive to hedge funds and venture capital?
My search of ETFs has turned up nothing but the usual clones as mentioned above.
As to the translation from Japanese to English, that is normal as sometimes there is no clear way to translate. Some of it is quite funny.
I ran across this earlier today. A new wearable pain relief device called Quell. The company making the device is NeuroMetrix. This wearable goes on your upper calf and works for chronic pain like low back, diabetic nerve pain, and knee pain.
Ticker is NURO. This does seem like a promising device and it is already FDA approved.
Geez, these NURO guys are getting NO credit! Market cap is $13MN. This is tiny of the tiny and it doesn't look like there's been any real bounce from the announcement that they were going to introduce the product. If it does well I guess this will be a superstar investment, but right now it seems like no one's willing to bet on that.
I wrote a bunch on Friday night about the exoskeleton companies, didn't quite finish, and then Windows kindly installed updates overnight and restarted my computer so I lost it. The basic gist was that you can see what funds/etfs own Ekso, Cyberdyne and ReWalk in this ownership section of M*'s quote page for each. These guys all went public in 2014 and there's not much interest from funds, although Ekso is clearly the least "discovered" and maybe you could even say its undiscovered considering the only fund that owns it is called 3D Printing and Technology and it has a whopping $2.8 million in AUM. Ekso seems to be the one with ties to the military and they're clearly getting funding from the military to develop those applications. Cyberdyne is the biggest in terms of market cap and seems to have made good progress in Germany, getting their product covered by state medical.
My conclusion was that Ekso seems like the most interesting opportunity at the moment because of their ties to the military, because they're clearly not discovered and because one of their 2015 goals is to be listed on a primary exchange. In addition, what's written about them on their own site and by Forbes is that they have the best technology out there. The biggest risk I see is that they say they'll need cash by the middle of this year and that'll mean dilution, but they've been very open about that so maybe its priced in. ReWalk has FDA approval, which is nice and they're in a better cash position than Ekso plus they've also made inroads with Germany, but somehow it just seems like they don't have as broad a relationship base as Ekso does in terms of future potential.
Thanks for the heads up on SBIO. I have placed SBIO along with the recently launched BBP and BBC on my HC watch list. All of these ETFs are very young, and have inadequate daily trading volume by my standards. I see no reason to be an early buyer of these funds.
As I have stated before, I remain very positive on HC and biotech for 2015 and beyond. So far this year, I have increased my position in PRHSX up to 14.5% and added a 6.5% position in FBT.
Comments
The portion of the healthcare sphere that involves robotics, wearables, bionics etc has huge growth potential. For someone with a long time to invest these are the kinds of future stocks that hold a lot of promise.
Regards,
Ted
http://www.mutualfundobserver.com/discuss/discussion/17999/new-biotech-etf-hits-the-market/p1
Jan 15 2015, 14:03 ET | By: Douglas W. House, SA News Editor Contact this editor with comments or a news tip
Money flow is decidedly negative today for (IBB -2%) (BIB -3.9%) biotech. For whatever reason, there always seems to be a sell-off at the end of the JP Morgan Healthcare Conference.
ALPS Medical Breakthroughs ETF Dow Jones
SBIO 25.87 -3.36%
Real-time: 2:55PM EST
https://www.google.com/finance?q=NYSEARCA:SBIO&ei=UBu4VOnFFY6lsQeH1IC4BA
Here's a question I keep thinking about and asking myself when I consider new healthcare investments: The expense ratios of these "passive" ETFs seems to fall between 50 and 100 basis points whereas Vanguard offers an active fund for only 30 basis points, T Rowe Price's healthcare fund costs 79 basis points and Fidelity's biotech fund costs 75 basis points. Are there any good reasons to go passive when you only have to pay 25 or 30 basis points for someone to be a bit more selective with your money and how to invest it, and especially in cases where the active funds have lower costs than the ETFs?
This area is still a wild frontier. I am still checking out some ETFs but everything I have ran into pretty much is a biotech clone of the funds above.
Ekso is pretty interesting. They went public a year ago and there was a huge spike in their price at the end of February that had pretty much all been given back by the end of March. Since then its generally trended lower but with a lot of volatility. In one of their presentations they hold out Cyberdyne and ReWalk as competitors. Cyberdyne is a Japanese company listed only in Frankfurt but they have the highest market cap of all three at something more than $2 billion. ReWalk claims to be the first company in the US to get FDA approval for an exoskeleton last year and they quickly went public after that. I read presentations from both Ekso and Cyberdyne and Ekso seems more interesting but part of that could be the reporting for Cyberdyne stuff must have been done in Japanese and translated to English in some automated way or by someone who isn't really fluent in English. I have yet to read the financial reports for ReWalk but it seems like all 3 are bleeding cash as they're still investing heavily in research & development and/or hiring more people to support growth. Do you know anything about these other guys? Just from a few hours of reading it looks like pretty amazing stuff and Ekso's presentation says there are a lot of people every year with spinal cord injuries who can benefit from this kind of stuff.
My search of ETFs has turned up nothing but the usual clones as mentioned above.
As to the translation from Japanese to English, that is normal as sometimes there is no clear way to translate. Some of it is quite funny.
Ticker is NURO. This does seem like a promising device and it is already FDA approved.
http://www.medicaldevice-network.com/news/newsneurometrix-pain-relief-quell-4445711
I wrote a bunch on Friday night about the exoskeleton companies, didn't quite finish, and then Windows kindly installed updates overnight and restarted my computer so I lost it. The basic gist was that you can see what funds/etfs own Ekso, Cyberdyne and ReWalk in this ownership section of M*'s quote page for each. These guys all went public in 2014 and there's not much interest from funds, although Ekso is clearly the least "discovered" and maybe you could even say its undiscovered considering the only fund that owns it is called 3D Printing and Technology and it has a whopping $2.8 million in AUM. Ekso seems to be the one with ties to the military and they're clearly getting funding from the military to develop those applications. Cyberdyne is the biggest in terms of market cap and seems to have made good progress in Germany, getting their product covered by state medical.
My conclusion was that Ekso seems like the most interesting opportunity at the moment because of their ties to the military, because they're clearly not discovered and because one of their 2015 goals is to be listed on a primary exchange. In addition, what's written about them on their own site and by Forbes is that they have the best technology out there. The biggest risk I see is that they say they'll need cash by the middle of this year and that'll mean dilution, but they've been very open about that so maybe its priced in. ReWalk has FDA approval, which is nice and they're in a better cash position than Ekso plus they've also made inroads with Germany, but somehow it just seems like they don't have as broad a relationship base as Ekso does in terms of future potential.
Thanks JC for bringing this up!
Thanks for the heads up on SBIO. I have placed SBIO along with the recently launched BBP and BBC on my HC watch list. All of these ETFs are very young, and have inadequate daily trading volume by my standards. I see no reason to be an early buyer of these funds.
As I have stated before, I remain very positive on HC and biotech for 2015 and beyond. So far this year, I have increased my position in PRHSX up to 14.5% and added a 6.5% position in FBT.
Kevin