It’s hard to imagine it now, but at the turn of the millennium, the big advancement in technology was not the latest phone app, it was the Human Genome Project. Since then, genetics advancements are now powering health and biotech industries, with the latest upgrades coming in DNA synthesis. A recent paper highlights the ability to create custom-designed DNA sequences, bolstering the case for an active biotech ETF like the ARK Genomic Revolution ETF (ARKG ).
Developed in the 1970s, so-called de novo DNA synthesis creates whole new strands of DNA without the use of a template, enabling the creation of new drugs and the performance of basic research, according to ARK Invest. As such, de novo DNA synthesis is a critical part of research into genetics and its uses.
That’s why a new paper published in Nature Reviews Chemistry merits attention. The piece and its research highlight how the current use of DNA-based capabilities has resulted in a “virtuous cycle” that has spurred demand for DNA sequencing and, in turn, cost declines for DNA synthesis that should enable even more powerful synthesis moving forward.
The active biotech ETF ARKG and its focus on disruptive innovation in the space present it as a major option to consider for those convinced by the potential of advances in DNA synthesis. ARKG seeks out firms that could benefit from such advancements in areas like gene editing, genetic therapy, molecular diagnostics, and more.
Charging 75 basis points, ARKG has outperformed its ETF Database category average and its FactSet segment average over the last one month, with its returns of 19.4% significantly outpacing the averages’ respective returns of 4.8% and 9% over the last month. ARKG holds Cologuard makers Exact Sciences Corporation (EXAS) as its highest-weighted stock at 11.7%, double the next-highest weight, Pacific Biosciences of California (PACB), at 5.7%.
Biotech and genetics offer investors a tech space with the benefit of ties to a defensive area in healthcare. Add that into the fundamental promise of advancements in genetics, and an active biotech ETF like ARKG can be a strategy to consider this year.
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