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South Africa’s Sygnia launches developed markets healthcare ETF


South African financial service company Sygnia has launched an ETF based on the Solactive Developed Markets Healthcare 150 Index – the Sygnia Itrix Solactive Healthcare 150 ETF.

Solactive writes that the ongoing COVID-19 pandemic put a strain on the global healthcare system. Businesses were required to innovate on short notice, catalysing business transformations in the entire global healthcare ecosystem. 

Furthermore, companies faced massive restructuring in their infrastructure, workforce, and supply chain management. Despite these obstacles, healthcare companies gained space to innovate, resulting in a performance increase, which is expected to continue due to the additional focus put on healthcare companies and the trend of personalising medication to account for patients’ individual requirements. 

According to WHO numbers, global spending on health continually rose between 2000 and 2018 and reached USD8.3 trillion or 10 per cent of global GDP in 2020. Growing awareness of healthcare and personalised medicine are expected to continue driving the innovation potential of global healthcare companies. The Solactive Developed Markets Healthcare 150 Index, which serves as the underlying for the ETF, tracks the largest 150 companies from the Developed Markets’ Healthcare Industries.

For index inclusion, companies must be part of either the Solactive GBS Developed Markets Large & Mid Cap USD Index or the Solactive GBS Developed Markets Small Cap USD Index. Both indices serve as the range of the developed market indices of Solactive’s Global Benchmark Series. A common industry classification selects potential constituents via their affiliation of the following industries: Medical Distributors, Managed Health Care, Hospital/Nursing Management, Medical/Nursing Services, Services to the Health Industry, Pharmaceuticals: Major, Pharmaceuticals: Other, Pharmaceuticals: Generic, Biotechnology, Medical Specialties, and Drugstore Chains. Additionally, Securities in the index universe are sorted by Free Float Market Capitalization in descending order.

Steffen Scheuble, CEO of Solactive, says: “Since the start of the Covid-19 pandemic, the healthcare sector was observed eagerly in the wake of the development of a potential vaccine against the virus. This attention influenced and accelerated developments in the entire healthcare sector, offering ground breaking approaches to both diagnose diseases and treat patients. We are very fortunate that Sygnia has chosen Solactive as their business partner to enable South African investors to invest in the future of global healthcare. Furthermore, we are very proud to find our first ETF client in South Africa with Sygnia, which is yet another step in Solactive’s global expansion.”

Iva Madjarova, Head of Investment Consulting at Sygnia, says: “Investing in healthcare brings a two-fold benefit to investors: the opportunity to earn high returns, while also contributing to the socio-economic improvement of societies around the globe. The Sygnia Itrix Solactive Healthcare 150 ETF is a low cost and efficient way for SA investors to gain global exposure to the healthcare sector.”

The Sygnia Itrix Solactive Healthcare 150 ETF started trading on August 6th, on the Johannesburg Stock Exchange (JSE).

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