The combination of a middling Process Pillar rating and a Low People Pillar rating limit  Global X Genomics & Biotechnology ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The team managing the passive strategy earns a Low People Pillar. The strategy merits an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a considerable overweight position in liquidity exposure and volatility exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The strategy's parent organization earns the firm an Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

Natera

CRISPR Therapeutics

Moderna

Ultragenyx Pharmaceutical

Agilent Technologies

BioMarin Pharmaceutical

Sarepta Therapeutics

Illumina

Bio-Techne

Rocket Pharma

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Global X Genomics & Biotechnology ETF earns an Average Process Pillar rating. 

The main driver of the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The size of the portfolio management team also reinforces the process. With four portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 28%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup.

 This strategy leans toward smaller, higher-growth companies than its average peer in the Health Morningstar Category. Examining additional factor exposure, this fund has constantly tilted toward stocks with higher trading volumes than its Morningstar Category Peers over the past few years. More-liquid assets contribute to more-flexible exit strategies without price changes and tend to be a ballast during market selloffs. For example, if the portfolio faces successive redemptions in a short period of time, it will be less likely to suffer from a significant loss. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy also has had an overweight bias to the volatility factor over these years, meaning it has owned companies that have a higher historical standard deviation of returns. This is a higher-risk, higher-reward approach. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. Furthermore, this strategy has leaned toward low-yield stocks over recent years, holding fewer companies with high dividend or buyback yields. This is demonstrated by the portfolio's low exposure to dividends or buybacks. While companies with high yields provide consistent income payments, they may cut payouts if their earnings fall. In recent months, the strategy also had less Yield factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio has allocations in its top two sectors, healthcare and financial services, that are similar to the category. The sectors with low exposure compared to category peers are basic materials and technology; however, the allocations are similar to the category. The portfolio is positioned across 42 holdings and is quite concentrated. In particular, 45.1% of the portfolio's assets are housed within the top 10 holdings, versus the category average of 38.7%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 17% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Average

Process

Global X’s team receives a Low People Pillar rating. The primary factor behind the rating is the parent firm's five-year success ratio of 30%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup. The parent firm's five-year retention rate of 67% also detracts from the team. The experience of the management team, which averages four years at this fund, hinders the team as well.

People

Mirae Asset Global Investments is a Korean asset manager and a key player in the Asian financial market. It is a wholly owned subsidiary of Mirae Asset Financial Group, founded by Hyeon Joo Park. Park’s leadership and entrepreneurial spirit have been the driving force behind the global rise of Mirae, and he holds a majority stake in the business. 
Mirae Asset has grown significantly over the years (USD 198 billion as of December 2022) across a diversified platform, of which about 60% of assets are managed in South Korea. We believe that Mirae’s core mutual fund business in the Asia-Pac region is relatively strong. It has a collaborative structure, a strong and large investment team, low manager turnover, competitive fees, and a disciplined approach to product-development pointing toward better stewardship practices relative to peers in these markets. However, this is in stark contrast to its exchange-traded fund business, which accounts for 41% of the total assets. 
The firm’s ETF lineup focuses largely on high-risk thematic strategies that seem gimmicky, emphasizing short-term asset-gathering. The firm appears to leverage trending topics such as robotics and artificial intelligence, virtual reality and gaming, and cloud computing. There’s a notable concern regarding the potential liquidation of these funds since they seem to be designed around investment fads. Furthermore, these products are often expensive, especially compared with broadly diversified index funds and ETFs. Unsurprisingly, Mirae's reflexive product-development strategy has led to an increase in fund closures.
Our experience engaging with the MAGI team to gather critical information for the parent assessment has not been as positive. It hasn’t been as transparent in its disclosures, and unlike its peers, its responsiveness has been inadequate. We prefer firms with a more transparent corporate culture. Overall, these actions hold us back, and the firm retains its Parent Pillar rating of Average.

Parent

Global X Genomics & Biotechnology ETF

GNOM tracks an index of global biotech equities, selected and weighted by market cap.

GNMO invests across companies benefiting from advancements in the field of genomics within biotechnology. The fund's historical performance has been poor amid volatile stock prices for underlying holdings. Genomics may be the future, but still missing a blockbuster application to drive a wave of bullish momentum into the segment.

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Intellia Therapeutics

Verve Therapeutics

Gene editing could revolutionize how millions of patients are treated all over the world. That could create big opportunities for some of the most exciting gene-editing stocks.

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Gene editing is revolutionizing medicine. For example, just weeks ago, the U.S. Federal Drug Administration approved a new gene-editing treatment for sickle cell disease and transfusion-dependent beta-thalassemia, a genetic disorder that prevents the production of hemoglobin in the blood and requires regular blood transfusions.

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Some of the top gene-editing stocks have had immense surge potential. Look at CRISPR Therapeutics (NASDAQ: CRSP ), for example.

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Alerian MLP ETF

ARK Genomic Revolution Multi-Sector ETF

Amplify Lithium & Battery Technology ETF

VanEck Vectors Biotech ETF

SPDR Bloomberg 1-3 Month T-Bill ETF

PIMCO Active Bond ETF

Amplify Seymour Cannabis ETF

Global X Autonomous & Electric Vehicles ETF

Alerian Energy Infrastructure ETF

First Trust Global Wind Energy ETF

iShares Core High Dividend ETF

iShares Nasdaq Biotechnology ETF

iShares Global Clean Energy ETF

iShares Core S&P Small Cap ETF

iShares U.S. Home Construction ETF

iShares Russell 2000 ETF

Adasina Social Justice All Cap Global ETF

KraneShares Electric Vehicles & Future Mobility Index ETF

KraneShares Global Carbon ETF

Global X Lithium & Battery Tech ETF

PIMCO Enhanced Short Maturity Active ETF

Invesco Dynamic Building & Construction ETF

First Trust NASDAQ Clean Edge Green Energy Index Fund

Invesco S&P 500 Equal Weight ETF

Good morning, VettaFi Voices! We are a week out from the VettaFi 2024 Market Outlook Symposium on December 14, which will feature a range of ETF industry leaders discussing their expectations for different areas of the financial markets and the economy in 2024.

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Editas Medicine

Gene editing is revolutionizing how the world approaches medicine. In fact, by “simply” removing cells from the body, editing them, and reintroducing them, we could help treat sickle-cell anemia, cancers, blood disorders, blindness, cystic fibrosis, and even muscular dystrophy if all goes according to plan.

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This article provides a dashboard with industry metrics in healthcare, then focus on the Global X Genomics & Biotechnology ETF. Pharmaceuticals/biotechnology and healthcare providers have fair value and quality scores. Healthcare equipment is the most overvalued subsector.

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GNOM is a $200 million ETF that invests in a forward-looking set of innovative businesses focused on the genomics industry. This is a long-term growth area, but it will need to get more profitable to get more popular. That could take a little while.

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CRISPR could revolutionize the way we treat thousands of diseases. Currently, there are about 7,000 caused by genetic disorders, which occur when a mutation affects your genes, or when you have the wrong amount of genetic material, as noted by the Cleveland Clinic.

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iShares Genomics Immunology and Healthcare ETF

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SPDR S&P Biotech ETF

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Gene editing stocks present themselves as one of the more lucrative investments in the healthcare sector. Gene editing, a revolutionary take on the science of genetic engineering, has the potential to countless lives around the globe.

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Pharmaceuticals and biotechnology have the best value and quality scores in the sector. Healthcare providers are close to their historical baseline in valuation and quality.

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The Global X Genomics & Biotechnology ETF tracks the Solactive Genomics Index. It invests in genomics and biotechnology companies. The fund is highly concentrated in one industry, which can negatively affect its performance.

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CRISPR could revolutionize the way we treat thousands of diseases.  Many of these diseases occur when mutations affect genes, or when people have the wrong amount of genetic material,  the Cleveland Clinic reported.

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Global X Longevity Thematic ETF 

Virtus LifeSci Biotech Clinical Trials ETF

Virtus LifeSci Biotech Products ETF

BlackRock Future Health ETF

Principal Healthcare Innovators Index ETF

Global X Telemedicine & Digital Health ETF

First Trust NYSE Arca Biotechnology Index Fund

Fidelity MSCI Health Care ETF

Nasdaq Pharm Shs Nasdaq Pharmaceuticals

First Trust Health Care AlphaDEX Fund

Amplify Treatments Testing & Advancements ETF

 Franklin Genomic Advancements ETF

ROBO Global Healthcare Technology and Innovation ETF

Invesco Nasdaq Biotechnology ETF

iShares U.S. Pharmaceuticals ETF

iShares U.S. Healthcare Providers ETF

iShares U.S. Medical Devices ETF

iShares Global Healthcare ETF

iShares U.S. Healthcare ETF

Eli Lilly

Global X Longevity Thematic ETF

First Trust Indxx Medical Devices ETF

Merck

Novo Nordisk

Invesco Dynamic Biotechnology & Genome ETF

Direxion Daily Pharmaceutical & Medical Bull 3X Shares

Simplify Health Care ETF

Invesco Dynamic Pharmaceuticals ETF

VanEck Vectors Pharmaceutical ETF

Invesco S&P SmallCap Health Care ETF

Invesco DWA Healthcare Momentum ETF

Invesco S&P 500 Equal Weight Health Care ETF

Vanguard Health Care ETF

Wisdomtree BioRevolution Fund

SPDR S&P Health Care Equipment ETF

SPDR S&P Health Care Services ETF

Health Care Select Sector SPDR Fund

SPDR S&P Pharmaceuticals ETF

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Pharmaceuticals and biotechnology have the best value and quality scores. Healthcare providers look undervalued relative to 11-year averages.

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ProShares Ultra Nasdaq Biotechnology

iShares Neuroscience And Healthcare ETF

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Beam Therapeutics

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Pharma and biotech ETFs are in great shape and are trading at a one-month high level.

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GNOM lacks efficient portfolio reshuffling and may not be able to gain from higher alpha-producing stocks in the near future.

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The 3D Printing ETF

ROBO Global Robotics and Automation ETF

Simplify Volt RoboCar Disruption and Tech ETF

Investment strategies geared to the future evaluate complex dynamics that can evolve rapidly. As innovation's market share has grown, investment capacity - as measured by average days to trade - also has improved significantly.

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Join us for a triple-header to determine the best genomics biotech ETF!

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News for Global X Genomics & Biotechnology ETF ETF (GNOM)