TLDR – This is a thematic ETF where a rising tide likely does not lift all boats. The ebb tide, however… Biotech is a place for individual selections, using your crystal ball to buy in before the news and therefore the market wakes up.

There is an ETF for everything, dream up a theme and the punters will come surely must be a discussion in the creator's meeting rooms. Oh, and let’s get us a catchy code.

CURE provides exposure to healthcare biotechnology stateside. For inclusion, companies must be biotechnology sub-industry of the US. healthcare sector and have minimum market cap and liquidity requirements. The companies may be in R&D or manufacturing of products based on genetic analysis and genetic engineering. Examples include the development of immunotherapy treatments and vaccines to treat human diseases.

With what has currently been happening in the world, that surely must have given tailwinds to the sector. Right?

Well, CURE is off over 40% in the last 12 months and has sunk to an all-time low.

There is a problem in investing this way, in a sector where it is not the market that wins. For example, in 2020, there were more than 75 biotech IPOs, and 2021 saw more than 100 added to the now over 700 biotech companies on market. A decade ago that number hovered just over 100.

Some of the listings were for companies in little more than the idea phase, ok, possibly further than an idea but not in human stage testing, meaning a long way from commercialisation.

This is also a highly regulated sector, and for consumers, that is a good thing although politicians playing politics can impact investors. This happened in several ways in the past year:

• IP protection (or lack of) – the US raised the possibility of waiving IP on Covid vaccines
• A mid-year Biden executive order in lifting a ban on “March-In-Rights” to lower drug prices. March-In-Rights are where the federal government has contributed to the creation of IP of a drug through grants or research, it may waive the IP and allow other companies to manufacture the drug for a lower cost.

While the sector is generally sine wave, overall this has not been a lucrative place for investors in the last few years. One positive thought is the research goes on and that means potentials for breakthroughs in a myriad of cures or therapies.

Personally, I think this is a place for individual company selections. Somewhere you need to listen to the lead scientist and make your own assessment of the progress and potential for it to be a game-changer. A word of caution though, this is often their life work as such it is difficult to determine their hope from reality.