First ETF to offer targeted exposure to the evolving generic drug
space
Company Website:
http://www.vaneck.com
NEW YORK -- (Business Wire)
Van Eck Global has launched the Market
Vectors Generic Drugs ETF (NASDAQ: GNRX), the first and only
Exchange-Traded Fund (ETF) to target global manufacturers of generic
drugs and biosimilars, similar copies of existing but difficult to
replicate biological drugs.
“With rising health care costs, drug manufacturing innovation, and
public support for less expensive options to brand name drugs, this is a
compelling ETF,” said Edward Lopez, Marketing Director with Van Eck.
“Our goal with any ETF is to help investors access opportunities
presented by evolving global markets. GNRX
allows investment in a major trend that has the potential to redefine
the pharmaceutical industry.”
According to the Generic Pharmaceutical Association (GPhA), 88 percent
of the drugs dispensed in the U.S. are generics. “That is a large number
and helps explain the rapid growth of manufacturers over the past
several years,” said James Duffy, Product Manager with Van Eck.
“However, until now, there had not been an ETF that offered targeted
exposure to the generic drug space.”
Expiring patents on various brand name drugs and the development of
biosimilars are among the main factors driving returns in the generic
pharmaceuticals space. Significant investment in research and
development is still required, which reduces competition, but time to
market can be quicker than brand name drugs, allowing companies to price
their drugs at a significant discount.
As a percentage of drugs distributed globally, spending on generics is
expected to increase from 40 percent in 2013 to 46 percent in 2018.1
“With much of that expected growth coming from emerging markets, we
believe having global exposure is essential,” continued Mr. Duffy.
“Whereas pharma-focused ETFs have typically concentrated on developed
markets, GNRX’s
global approach provides exposure to the full potential of the generic
drugs industry.”
GNRX
seeks to replicate as closely as possible, before fees and expenses, the
price and yield performance of the Indxx Global Generics & New Pharma
Index (the “Index”). To be included in the Index, companies must derive
a significant proportion of their revenues (or have the potential to
derive a significant proportion of their revenues) from the generic drug
industry or have a primary business focus on the generic drug industry.
Constituents must also meet market capitalization, daily trading volume,
and daily trading activity requirements.
As of December 31st, 39 percent of the constituents in GNRX’s
underlying index were domiciled in the United States, with India,
Israel, South Korea and Japan, having the next largest country
weightings, respectively. Approximately 76 percent of the Index’s
constituents were large cap companies, those with market caps of more
than $6 billion, while 24 percent were mid-caps (market caps between
$1.5 billion and $6 billion).
Van Eck notes that an investment in GNRX
incurs risks which include those associated with investments in the
pharmaceutical and biotechnology sectors as well as foreign and emerging
markets investments, particularly those concentrated in India and
Ireland.
GNRX
has a gross expense ratio of 0.63 percent and net expense ratio of 0.55
percent, which is capped contractually until February 1, 20172.
GNRX
joins Van Eck Global’s family of healthcare-focused industry ETFs, which
also includes Market
Vectors Biotech ETF (NYSE Arca: BBH) and Market
Vectors Pharmaceutical ETF (NYSE Arca: PPH).
About Van Eck Global
Founded in 1955, Van Eck Associates Corporation was among the first U.S.
money managers helping investors achieve greater diversification through
global investing. Today the firm continues this tradition by offering
innovative, actively managed investment portfolios in hard assets,
emerging markets, precious metals including gold, fixed income, and
other alternative asset classes. Market Vectors exchange-traded products
have been sponsored by Van Eck since 2006 when the firm launched the
nation’s first gold-mining ETF. Today, Market Vectors ETFs and ETNs span
several asset classes, including equities, fixed income (municipal and
international bonds) and currency markets. Market Vectors is one of the
largest ETP families in the U.S and worldwide. Van Eck also offers
mutual funds, insurance trust funds, separate accounts and alternative
investments. Designed for investors seeking innovative choices for
portfolio diversification, Van Eck’s investment products are often
categorized in asset classes having returns with generally low
correlations to those of more traditional U.S. equity and fixed income
investments.
Important Disclosures
The Fund is subject to risks, which include those associated with
investments in the pharmaceutical and biotechnology sectors, including
development, procurement and/or marketing of drugs, the development,
protection, and exploitation of intellectual property rights, patent
expiration, and regulatory scrutiny and approval, which may adversely
affect the Fund or Fund trading. Foreign and emerging markets
investments, particularly those concentrated in India and Ireland, are
subject to risks, which include changes in economic and political
conditions, foreign regulations, and currency exchange rates, unstable
governments, and limited trading capacity, which may make these
investments volatile in price or difficult to trade. Non-diversified
funds such as those concentrated in companies of smaller capitalization
or certain sectors may also be subject to elevated risks.
Indxx Global Generics & New Pharma Index (the “Index”) is the exclusive
property of Indxx, LLC. Indxx, LLC uses its best efforts to ensure that
the Index is calculated correctly. Indxx, LLC has no obligation to point
out errors in the Index to third parties. Market Vectors Generic Drugs
ETF is not sponsored, endorsed, sold or promoted by Indxx, LLC and
Indxx, LLC makes no representation regarding the advisability of
investing in Market Vectors Generic Drugs ETF. Investors cannot invest
directly in the index.
Fund shares are not individually redeemable and will be issued and
redeemed at their “Net Asset Value” (NAV) only through certain
authorized broker-dealers in large, specified blocks of shares called
creation units and otherwise can be bought and sold only through
exchange trading. Creation units are issued and redeemed principally in
kind. Shares may trade at a premium or discount to their NAV in the
secondary market.
Investing involves substantial risk and high volatility, including
possible loss of principal. An investor should consider the investment
objective, risks, charges and expenses of a Fund carefully before
investing. To obtain a prospectus and summary prospectus, which contain
this and other information, call 888.826.2333 or visit
marketvectorsetfs.com. Please read the prospectus
and summary
prospectuscarefully before investing.
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Source: IMS Health
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2 | |
Cap excludes certain expense, such as interest
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Source: Van Eck Global
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