Just what the doctor ordered - CURE biotech ETF now available (ASX code: CURE)

Nov 12, 2018

Just what the doctor ordered - CURE biotech ETF now available (ASX code: CURE)

• CURE is Australia’s only pure-play biotech ETF

• Provides access to a range of companies including the world’s leading producer of orphan drugs and another with more than US$5 billion in sales for its rheumatoid arthritis treatment

• CURE is the latest in the ‘Future Present’ ETF range designed to deliver outsized returns

SYDNEY, November 12 – ETF Securities has launched its CURE exchange traded fund (ETF) on the ASX, providing Australian investors with broad-based exposure to some of the world’s most exciting healthcare biotechnology companies.

CURE physically replicates the S&P Biotechnology Select Industry Index, which has achieved annual growth of 21.9 percent in Australian dollar terms over the five years to 31 October 2018 compared with annual gains of 6 percent by the local benchmark S&P/ASX 200 index over the same period.

“The index tracks many of the US healthcare biotechnology enterprises that are developing the intellectual property for the breakthroughs of the future,” said Kris Walesby, Head of ETF Securities Australia, the country’s only independent and locally-owned ETF provider.

“The Australian equities market simply cannot provide a comparable universe of investible stocks by either size or variety,” said Mr Walesby. “In fact, there are probably only two listed Aussie companies that could make it into the US index if they were listed there.”

“If you want broad-based biotech exposure, you have to go to the US market,” Mr Walesby added.

With a fee of 0.45 per cent, CURE offers investors exposure to more than 120 biotechnology firms, concentrated on small and mid-cap companies. There are demanding filters to be met before a company can be included in CURE, with companies needing to meet S&P Dow Jones Indices’ Float Adjustment liquidity requirements. Stocks are modified equally weighted and no stock can have a weighting of more than 4.5 per cent.

Among the stocks underpinning the index is Celgene, which is the world’s largest orphan drug manufacturer. This company has a focus on developing therapies for a number of rare and difficult to treat cancers. Celgene had worldwide orphan drug sales in 2017 of US$10 billion.

Investors in CURE will also gain access to biotech major Amgen, whose Enbrel treatment for rheumatoid arthritis and related conditions had 2017 sales of US$5.4 billion. Its market cap sits at around US$130 billion.

“This is the first time an Australian investor can obtain a pure-play exposure to biotechnology developers in the US healthcare industry while also retaining all the protections that diversification brings,” Mr Walesby said.

“This is very much a high growth-oriented product,” he said. “Given the mainly mid- and small-cap profiles of the constituent stocks, we’d expect to see profitable M&A activity. We are pleased to be adding CURE to our ‘Future Present’ series of ETFs.”

Founded by Australian philanthropist Graham Tuckwell, ETF Securities created the first commodity exchange traded product with a gold ETF and now has more than $1 billion in funds under management in Australia.