Fears of a recession are driving investors to look for more reliable areas to invest. History shows that in previous recessions, healthcare stocks were more likely to perform better than the broad market. In the last four recessions since 1990, consumer and healthcare stocks were the only two positive sectors in the S&P 500, according to CFRA Research.1 This is why many investors have strongly considered healthcare as a defensive strategy in their portfolios.

Growth prospects in the healthcare sector remain strong as the effects of the pandemic continue to highlight our need for new technological advancements. This increasing need is driving innovations, refining processes and procedures, and reshaping how the industry looks at patient care. Cutting-edge technologies such as artificial intelligence (AI), virtual reality (VR), internet of medical technology (IoMT), deep learning, wearable medical devices, and big data, are helping pave the way to quicker, more accurate, predictive and preventative healthcare.

AI, for example, is transforming the future of healthcare. For years now, heart specialists have implanted insertable cardiac monitors (ICMs) to keep track of sporadic heart arrhythmia. These devices have been the most popular diagnostic tool for heart rhythm monitoring since they were first introduced in 1990.2

While ICMs are preferred diagnostic tools, they also have a downside, false alerts. Nowadays, doctors are using AI to reduce the incidence of false positives with ICMs. In 2021, Medtronic PLC, which is held by the fund, used AI algorithms to reduce false starts originating from irregular or rapid heart rhythms and long pauses between heart beats.3

Medtronic is a pioneer when it comes to using advanced technologies in healthcare, for pacemakers, heart valves, and continuous glucose monitoring pumps.4

Another technological advancement in healthcare involves using a tool—originally designed to map distant galaxies—to analyze cancerous tumors based on algorithms. AstroPath, an imaging platform, can identify how certain tumor cells interact with tissues in the body. This allows doctors to learn more about how patients respond to various treatments.5

Researchers at John Hopkins University’s Mark Foundation Center for Advanced Genomics and Imaging received $10 million from The Mark Foundation and the Bloomberg~Kimmel Institute for Cancer Immunotherapy to further its work with AstroPath and other cancer research.

The major funding will go toward clinical trials for cancer patients. The ultimate goal is to map the entire immune system and understand how it varies from person to person.

Eli Lilly & Company, Using AI to Increase Efficiency

Eli Lilly & Company, which is held by the fund, is using AI to research and create new drugs to treat amyotrophic lateral sclerosis, a motor neuron diseases.6 The company also recently announced plans to use AI to pinpoint the molecules that have the best chance of making it through the drug discovery, development, and commercialization processes.

Only about 12% of molecules move from phase one to commercialization. AI helps speeds up and narrows down the field to a handful of molecules and cut drug development time by about three years.7

Bristol Myers Squibb, Strengthening Cancer Drug Production

Bristol Myers Squibb, which is also held by the fund, announced plans to acquire Turning Point Therapies for $4.1 billion. The addition of Turning Point will help strengthen the company’s formidable pipeline of cancer drugs. Turning Point’s lead drug is Repotrectinib, a mid-stage candidate that tests for first-line lung cancer.8

The acquisition is seen as a direct challenge to competitor Roche, which is held by the fund. Turning Point’s Repotrectinib targets the same gene mutations as Roche’s cancer drug Rozlytrek.

Investing in Global Healthcare with LIFE ETF

One way to simplify investing in the cutting-edge healthcare industry is through an ETF. A healthcare ETF offers a diversified portfolio of holdings in healthcare stocks. ETFs ensure that your risk is diversified, but that you are still invested in blue-chip names that you trust.

Evolve Global Healthcare Enhanced Yield Fund (LIFE ETF) provides investors with exposure to twenty global blue-chip companies in the healthcare industry, with a covered call strategy that is actively managed to provide increased yield potential while helping mitigate risk. LIFE ETF is available in hedged, unhedged and USD classes, as well as mutual fund versions.

For more information about the Evolve Global Healthcare Enhanced Yield Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

For the latest information on investing in healthcare and updates on related investment products, sign up for our weekly newsletter here.

Sources:

  1. “How Does The Market Perform During An Economic Recession? You May Be Surprised,” Forbes, June 2, 2022; https://www.forbes.com/sites/sergeiklebnikov/2022/06/02/heres-how-the-stock-market-performs-during-economic-recessions/?sh=351a88226852
  2. “How AI is transforming the future of healthcare,” Fast Company, June 28, 2022; https://www.fastcompany.com/90764389/how-ai-is-transforming-the-future-of-healthcare.
  3. “Medtronic Announces FDA Clearance and Results of Artificial Intelligence Algorithms for Cardiac Monitoring,” Medtronic plc, July 28, 2021; https://news.medtronic.com/2021-07-28-Medtronic-Announces-FDA-Clearance-and-Results-of-Artificial-Intelligence-Algorithms-for-Cardiac-Monitoring.
  4. “Future of Healthcare,” Medtronic plc, last accessed July7, 2022; https://www.medtronic.com/us-en/c/healthcare-technology.html?cmpid=DSP_Article_Q1_Data_AI_Fast_Company_Defining_Healthcare_Technology_Health_System_Leader_061322_071122_FY23.
  5. “Analysis of multispectral imaging with the AstroPath platform informs efficacy of PD-1 blockade,” Science.com, June 11, 2021; https://www.science.org/doi/10.1126/science.aba2609.
  6. “Verge Genomics Announces Three-Year Collaboration With Lilly to Discover and Develop Novel Treatments Using Its AI-Driven All-in-Human Platform,” Verge Genomics, July 8, 2021; https://www.businesswire.com/news/home/20210708005085/en/.
  7. “Eli Lilly And Parexel Talk About The ROI Of Practical AI,” Forbes, June 9, 2022; https://www.forbes.com/sites/gilpress/2022/06/09/eli-lilly-and-parexel-talk-about-the-roi-of-practical-ai/?sh=71db6f9220ab.
  8. “Bristol Myers Squibb to Acquire Turning Point Therapeutics, a Leading Precision Oncology Company,” Bristol Myers Squibb, June 3, 2022; https://news.bms.com/news/corporate-financial/2022/Bristol-Myers-Squibb-to-Acquire-Turning-Point-Therapeutics-a-Leading-Precision-Oncology-Company/default.aspx.

 

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.
Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.
Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Sign up for our newsletter

Disruptive and innovative trends are fundamentally transforming our world. Remain educated and be informed.