What Is a Genomics ETF? A Complete Guide to the Breakthrough Biotech

Learn how to tap into the future of healthcare with genomics ETFs.

kent
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Research Lead
Reviewed by: Ron Day
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Edited by: Ron Day

Genomics ETFs are exchange-traded funds that offer investors diversified exposure to the rapidly growing field of genomics, which is the study of genes and how they work. Genomics has the potential to revolutionize many industries, including healthcare, biotechnology and pharmaceuticals, as it plays a crucial role in understanding genetic diseases, personalized medicine and genetic research. 

What Is Genome Editing?

Genome editing refers to the precise modification of an organism's DNA or genome. This process involves altering specific DNA sequences within an organism's chromosomes, either by adding, deleting, or replacing genetic material. The most commonly used genome editing technique is CRISPR-Cas9, although other methods like zinc finger nucleases (ZFNs) and transcription activator-like effector nucleases (TALENs) have been used as well. These techniques allow scientists to target specific genes or regions in the genome and make precise changes to the DNA sequence. 

Genome editing can be used for various purposes, including: 

  • Correcting genetic mutations that cause diseases. 
  • Studying gene function and regulation. 
  • Creating genetically modified organisms (GMOs) for research, agriculture, or other applications. 
  • Potentially, treating genetic disorders in humans through therapies like ex vivo gene editing, where cells are modified outside the body and then reintroduced. 

Genome Editing Companies

Genome editing companies develop new gene editing technologies that have the potential to revolutionize healthcare. For example, genome editing could be used to develop new treatments for cancer, genetic diseases, and other conditions. 

The main genome editing company stocks include: 

  • CRISPR Therapeutics (CRSP) is a Swiss-based company that focuses on developing CRISPR-Cas9 gene-editing therapies for various genetic diseases. They have multiple programs in clinical development. 
  • Editas Medicine (EDIT) is a U.S. headquartered biotechnology company headquartered with a strong focus on CRISPR-based gene editing. They are actively involved in developing therapies for genetic disorders. 
  • Intellia Therapeutics (NTLA) is another U.S.-based company specializing in CRISPR-Cas9 technology. They work on developing gene-editing therapies for a range of diseases, including genetic and autoimmune conditions. 
  • Beam Therapeutics (BEAM), also based in the United States, focuses on precision genetic medicines using base editing technology. They aim to develop therapies for genetic disorders and cancer. 
  • Sangamo Therapeutics (SGMO) has a history of developing genome-editing technologies, including zinc finger nucleases (ZFNs). They have a pipeline of potential gene therapies for various diseases. 

Genomics Solving Healthcare Problems

Gene therapy and CRISPR-Cas9 genome editing are the two main areas of genomics that are working to solve healthcare problems. The primary goal of gene therapy is to correct genetic mutations, introduce new genes, or modulate gene expression to alleviate or cure various diseases, including genetic disorders, inherited conditions, and acquired illnesses.  

CRISPR-Cas9, often simply referred to as CRISPR, is a revolutionary genome editing technology that allows for precise modification of an organism's DNA. CRISPR stands for "Clustered Regularly Interspaced Short Palindromic Repeats," which are specific sequences found in the DNA of bacteria and archaea. Cas9 is a protein that acts as a molecular scissors capable of cutting DNA at specific locations. 

Some of the key problems and areas that CRISPR-Cas9 seeks to treat include genetic conditions, such as sickle cell anemia and muscular dystrophy, as well as cancer and infectious diseases and the development of biotechnological products and pharmaceuticals

CRISPR-Cas9 also has applications in agriculture for creating genetically modified crops with improved traits such as increased yield, resistance to pests and enhanced nutritional content. 

Investing in Genomics ETFs

Investing in genomics ETFs can be an attractive option for investors who believe in the growth potential of the genomics industry but may not want to pick individual stocks. By investing in a genomics ETF, investors can potentially benefit from the overall growth and innovation in the genomics sector while diversifying across multiple related industries, such as biotechnology, pharmaceuticals and agricultural biology. 

Genomics ETFs List

TickerFundAUMExpense Ratio
ARKGARK Genomic Revolution ETF$1.98B0.75%
PBEInvesco Biotechnology & Genome ETF$240.13M0.59%
GNOMGlobal X Genomics & Biotechnology ETF$143.100.30%
IDNAiShares Genomics Immunology and Healthcare ETF$134.430.47%
GDOCGoldman Sachs Future Healthcare Equity ETF$110.370.75%

Top genomics ETFs ranked by assets under management. Data as of September 15, 2023

The Outlook on Genomics ETFs

The outlook on genomics ETFs is positive. The genomics sector is expected to grow rapidly in the coming years, and genomics ETFs offer investors exposure to this growth. 

Here are some of the factors that are driving growth in the genomics sector: 

  • The increasing prevalence of genetic diseases: Genetic diseases are becoming more prevalent due to factors such as aging and environmental pollution. This is creating a demand for new treatments for genetic diseases. 
  • The development of new gene editing technologies: New gene editing technologies, such as CRISPR-Cas9, are making it possible to develop new treatments for a variety of diseases, including cancer, genetic diseases, and infectious diseases. 
  • The increasing demand for personalized medicine: Personalized medicine is a field of medicine that uses genetic information to tailor treatments to individual patients. This is becoming more important as we learn more about the genetic basis of diseases. 

Bottom Line on Investing in Genomics ETFs

Genomics ETFs offer investors exposure to a variety of companies in the genomics sector, including companies that are developing new drugs and therapies, sequencing genomes, and providing genetic testing services. Although genomics ETFs have significant long-term growth potential, it’s important to note that the genomics sector is still in its early stages of development and these niche investments are subject to risk and volatility.  

Investors should carefully evaluate these genomics funds to be sure they align with their risk tolerance, time horizon and investment goals. 

Kent Thune is Research Lead for etf.com, focusing on educational content, thought leadership, content management and search engine optimization. Before joining etf.com, he wrote for numerous investment websites, including Seeking Alpha and Kiplinger. 

 

Kent holds a Master of Business Administration (MBA) degree and is a practicing Certified Financial Planner (CFP®) with 25 years of experience managing investments, guiding clients through some of the worst economic and market environments in U.S. history. He has also served as an adjunct professor, teaching classes for The College of Charleston and Trident Technical College on the topics of retirement planning, business finance, and entrepreneurship. 

 

Kent founded a registered investment advisory firm in 2006 and is based in Hilton Head Island, SC, where he lives with his wife and two sons. Outside of work, Kent enjoys spending time with his family, playing guitar, and working on his philosophy book, which he plans to publish in the coming year.