The fund covers companies that generate at least half of their revenue, operating income or assets from five categories: gene editing, genomic sequencing, genetic medicine/therapies, computational genomics and genetic diagnostics, and biotechnology, according to the prospectus.
GNOM comes with an expense ratio of 0.68% and lists on the Nasdaq stock exchange.
One of the most interesting aspects of the ETF is that its methodology incorporates artificial intelligence. While its original selection universe is FactSet’s health care classification, index provider Solactive uses natural language processing to identify companies that fall under the scope of the genomics and biotechnology space, the prospectus says.
GNOM can select its 40 holdings from stocks that meet size and liquidity requirements that are listed in 23 mainly developed countries. Components are then weighted based on a modified market-capitalization approach to ensure it won’t become overly concentrated in some stocks, the document notes.
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