Van Eck Global begun trading the Market Vectors Generic Drugs ETF (NASDAQ: GNRX) on Wednesday, January 13, 2015.
Here is a synopsis of the new ETF:
|Symbol: GNRX||Exchange: NASDAQ|
|Name: Market Vectors Generic Drugs ETF||Net Expense Ratio: 0.55%|
The Market Vectors Generic Drugs ETF seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Indxx Global Generics & New Pharma Index.
The Fund normally invests at least 80% of its total assets in securities that comprise the Fund’s benchmark index. The Fund is classified as a non-diversified fund and, therefore, may invest a greater percentage of its assets in a particular issuer. The Fund may concentrate its investments in a particular industry or group of industries to the extent that the Index concentrates in an industry or group of industries.
The Indxx Global Generics & New Pharma Index includes exchange-listed companies, on a global basis, that derive a significant proportion (as determined by Indxx, LLC (Index Provider) of their revenues (or that have the potential to derive a significant proportion of their revenues) from the generic drug industry, or that have a primary business focus on the generic drug industry. A company is deemed to derive a significant proportion of its revenue from the generic drug industry if:
(i) according to a public filing, it generates a majority of its revenue from the sale of generic drugs,
(ii) in the absence of a revenue segment breakdown, it has stated its primary business to be the development and production of generic drugs or
(iii) has a drug pipeline composed of generic drug filings.
The universe of companies in the generic drug industry is determined based on proprietary research and analysis conducted by the Index Provider. The Index Provider uses a variety of publicly available sources for such analysis, including financial statements and other reports published by companies to determine whether the company is actively engaged in the generic drug industry. Products of these companies are pharmaceuticals that are identical, or bioequivalent in the dosage form, safety, strength, quality and intended usage to brand name pharmaceuticals. Such companies may include small- and medium-capitalization companies and U.S., foreign and emerging market issuers. American depositary receipts (ADRs) and global depositary receipts (GDRs) are eligible for inclusion in the Index.
As of October 30, 2015, the Index included 85 securities of companies with a minimum market capitalization of $993 million and a weighted average market capitalization of $24.45 billion while was concentrated in the pharmaceutical sector, and the biotechnology sector represented a significant portion of the Index.
Fund’s Top Holdings (01/12/2016):
|Teva Pharmaceutical Industries Ltd||TEVA US||8.62%|
|Actavis Plc||AGN US||8.50%|
|Sun Pharmaceutical Industries Ltd||SUNP IN||5.75%|
|Baxalta Inc||BXLT US||5.54%|
|Mylan Inc/Pa||MYL US||4.99%|
|Perrigo Co||PRGO US||4.35%|
|UCB BB||Ucb Sa||3.41%|
|Endo Pharmaceuticals Holdings Inc||ENDP US||2.32%|
|Lupin Ltd||LPC IN||2.32%|
|Alkermes Plc||ALKS US||2.06%|
Top Country Weightings (01/12/2016):
GNRX Home Page
GNRX is the first and only ETF to target global manufacturers of generic drugs. Here is a comment from from James Duffy, Product Manager with Van Eck:
“As a percentage of drugs distributed globally, spending on generics is expected to increase from 40 percent in 2013 to 46 percent in 2018. With much of that expected growth coming from emerging markets, we believe having global exposure is essential.” According to the Generic Pharmaceutical Association (GPhA), 88 percent of the drugs dispensed in the U.S. are generics.