Industry Updates

ETFs exposed to Pfizer jump on coronavirus vaccine boost

Pfizer up as much as 15.2% on the vaccine news

Tom Eckett

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A number of ETFs with heavy weightings to Pfizer jumped on Monday following news the pharmaceuticals company had successfully tested a coronavirus vaccine.

Pfizer rose as much as 15.2% following the announcement of the vaccine which the firm said is 90% effective in protecting people from coronavirus.

The $45m WisdomTree US Equity Income UCITS ETF (DHS), which has the largest weighting (5.8%) to Pfizer across all European-listed ETFs, was up 6.2% on 8 November as a result.

The healthcare company is the second largest company in the ETF which offers exposure to the highest dividend yielding equities in the US.

Elsewhere, the $393m Invesco Health Care S&P US Select Sector UCITS ETF (XLVS) has a 4.9% weighting and was up 1.5% while the $1bn Xtrackers MSCI World Heath Care UCITS ETF (XDWH) has risen 1.7%.

Furthermore, XDWH saw inflows of $113m last week, according to data from Ultumus, after healthcare was the best performing sector boosted by news of Joe Biden’s US election victory. It is thought he is less likely to take the Affordable Health Care Act apart creating a business as usual environment for those companies.

As Guillaume Mascotto, vice president, head of ESG and investment stewardship at American Century Investments, said: “Tackling the pandemic will certainly remain an issue of priority order for Biden’s administration. This should also continue to position healthcare as a key investment theme in 2021.”

Elsewhere, value ETFs are on the rise as investors put risk on the table following the double boost of a Biden win and a coronavirus vaccine.

The $1.2bn iShares Edge MSCI USA Value Factor UCITS ETF (IUVL) was up 4% while the while the $169m Vanguard Global Value Factor UCITS ETF (VDVA) jumped 5.9%.

Russ Mould, investment director at AJ Bell, commented: “We might be witnessing a massive rotation from growth to value, although the great unknown is whether this is sustainable.

“Value as an investment style has struggled for the past decade and over this period history showed that as soon as it got its moment in the sun, the style quickly lost momentum.”

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