Liquid Alternatives: Corona Spawns a Scarily-named ‘Biothreat’ ETF Theme
Two fund managers have filed to launch biothreat-themed ETFs.
Somebody had to ride the trend. On April 21, ETF distributor Pacer Financial filed with the SEC to launch its Pacer BioThreat ETF. The ETF sports the highly expressive ticker of VIRS. (FINANCIAL ADVISOR)
On April 24, ETF Managers Trust filed with the SEC for its ETFMG BIO ETF.
These ‘biothreat’ themed ETFs are obviously trying to ride the trend of the coronavirus pandemic.
Pacer BioThreat ETF (VIRS)
The ETF will track the BioShares BioThreat Index. The index follows “U.S.-listed companies that help protect against or recover from biological threats to human health based on a proprietary, multi-step research process.”
The index is constructed by LifeSci Index Partners LLC. It employs fundamental research to identify the most important current and emerging biological threats to human health including pandemic diseases, biological warfare, food, and water safety, environmental safety, and natural disasters.
Then it scans publicly available information such as financial reports and screens, corporate websites, news reports, and interviews with key people in this broad space.
It identifies publicly traded companies that “combat pandemic diseases such as the novel coronavirus (COVID-19), Zika, H1N1, Ebola, avian flu, and MERS.”
The index also looks at companies that combat biological or chemical warfare such as anthrax, sarin gas, variola virus (smallpox and other poxes), and brucellosis.
COVID-19 the catalyst
“There is likely to be demand for a thematic diversified strategy seeking to combat biotechnology threats as Covid-19 has reshaped global economies,“ said Todd Rosenbluth, the New York-based head of ETF and mutual fund research at CFRA, to Bloomberg. “However, many of these likely constituents will be in early stages of growth and profitability. They may perhaps also be trading at a premium due to investor optimism.”
ETFMG BIO ETF
Another ETF themed around biothreats is on the anvil.
ETF Managers Trust has filed a post-effective amendment, registration statement with the SEC for the ETFMG Bio ETF.
The ETF seeks to provide investment results that track the total return performance of the Prime Bio ETF Index.
The Index tracks the performance of U.S.-listed companies that are engaged in “Vaccine Development and/or Diagnostics Focused Business.”
The businesses include vaccines for infectious diseases or biological testing technologies for infectious diseases.
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