3 Cathie Wood Healthcare Stocks To Add To Your Portfolio

Laboratory Test Tubes

Despite generating lean capital gains on her holdings in the healthcare industry, Cathie Wood has maintained her positions because she expects genomics to emerge as the next big sector in 2021 that could deliver electric vehicle (EV) industry-like gains. As such, with their progress in the field of therapeutics and cancer research, Novartis (NVS), Vertex Pharmaceuticals (VRTX), and Regeneron Pharmaceuticals (REGN) are the top holdings in Wood’s Genomic Revolution ETF. Thus, we think these companies should be valuable additions to one’s portfolio.

Renowned investor Cathie Wood has had a vested interest in the healthcare industry for a long time, with big bets on the genome revolution. To capitalize on biotechnology industry growth, Wood launched Ark Genomic Revolution ETF (ARKG) in 2014. With the biotech industry holding steady over the past five years, ARKG has gained 27.5% since its inception. However, Wood expects the industry to gain momentum this year because, in the wake of the COVID-19 pandemic, major countries have been restructuring their healthcare sectors to be prepared for future public health calamities. With the potential to cure serious incurable ailments, such as aggressive cancers or cystic fibrosis, Wood believes DNA sequences and genome mapping could  redefine healthcare.

With approximately $9.44 billion in net assets, ARKG is one of the largest actively managed ETFs in the industry, with at least 80% of the funds invested directly in relevant domestic and foreign equity securities. Wood expects DNA sequencing to emerge as a global disruptive trend this year itself. This has motivated more investors to bet on the healthcare industry through ARKG. Consequently, ARKG’s NAV has increased 186% over the past year. Novartis AG (NVS - Get Rating), Vertex Pharmaceuticals Incorporated (VRTX - Get Rating) and Regeneron Pharmaceuticals Inc. (REGN - Get Rating) are among ARKG’s top seven holdings ARKG. And given their impressive innovative capabilities and solid financials, these companies are expected to lead the healthcare revolution through genomics globally.

Wood recently observed in a CNBC interview that, “We can honestly say that until now more than half of all healthcare decisions were in some part made through guesses or experiences. Now we’re going to have the data.” The global biotechnology market is expected to grow at a CAGR of 15.8% over the next seven years to reach $752.88 billion by 2028. 

Novartis AG (NVS - Get Rating)

As one of the largest pharmaceutical companies in the world, NVS is a prime holding in Wood’s Ark Genomic Revolution (ARKG) fund. As of April 22, ARKG holds 4.29 million shares of NVS, translating to a 3.99% weighting in the portfolio. The stock has a weighted rank of #6 in the fund. Wood  has a 0.19% stake in the company.

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