‘GERM’ ETF Targets Vaccines, Treatments

ETFMG launches first ETF to capitalize on the coronavirus.

Reviewed by: Heather Bell
Edited by: Heather Bell

Today, ETF Managers Group rolled out what looks to be the first COVID-19-inspired ETF, though there are several others waiting in the wings. The ETFMG Treatments, Testing and Advancements ETF (GERM) tracks the Prime Treatments, Testing and Advancements Index and focuses on U.S.-listed companies that research, develop and provide testing and treatments for infectious diseases.

GERM comes with an expense ratio of 0.68% and lists on the NYSE Arca exchange.

The fund divides its holdings into two buckets: Treatment and Testing. To be classified under the former, a company must have at least one vaccine in any phase, from pre-clinical research to commercial availability. To be classified under the latter, a company must derive at least half of its revenue from the development and provision of biological tests, the prospectus says.

Companies are weighted based on a combination of equal weighting and market capitalization, with companies divided into tiers based on their size and then either equal weighted or market-cap weighted within those tiers. To be included in the index, companies must meet minimum size and liquidity requirements. Reconstitutions and rebalances are scheduled quarterly, according to the document, which also notes that the index had 56 components in early June.

Contact Heather Bell at [email protected]

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.