Developments in gene editing and CRISPR may sound like Greek to most investors, but unfamiliar industries such as these can provide huge opportunities for investors, albeit with some risks, according to Kevin Kelly, founder and CEO of Kelly ETFs.
In fact, Kelly launched an ETF based on the new medical developments in exactly these areas less than a month ago, known as Kelly CRISPR & Gene Editing Technology ETF (Nasdaq:XDNA). The ETF can serve as a guide in how to invest in something that is unknown to most investors and is also a rapidly changing field that can present enormous opportunities for investors.
“Gene editing is still in its infancy. Scientists have spent the last 10 years figuring out how to use the biological scissors that enables them to edit genes, cutting out bad ones and inserting good ones,” Kelly said in an interview.
Kelly, who offers other ETFs through Kelly ETFs, had his eye on new medical developments for some time already. “But when I heard that they successfully edited the genes inside the body of a patient who was suffering from sickle cell anemia to eliminate her symptoms last summer, I said I had to get into this. There have been remarkable milestones that have been met in just the last year.”
CRISPR is a medical tool for editing genomes that allows researchers to alter DNA sequences and modify gene function.
Companies that are developing this technology are not going to make money for a long time, and there is a degree of risk in investing in them because it is impossible to tell which companies will have staying power and which will fall by the wayside. But the same investments offer huge opportunities, Kelly said. “It is sort of like when the iPhone was introduced in 2007: No one knew if it would be successful.
“Now, healthcare is at the same point. It is the dawn of a new era,” Kelly said. “When I am investing in these companies, it is for five or 10 years in the future.”
The future of the break-through companies is uncertain because they go after different diseases, he added. “Some companies are working on silencing genes and some on changing them. What we like about the healthcare space is that there is a lot of collaboration among companies. For instance, companies such as Regeneron and Verve Therapeutic, which work together to create a deep knowledge base, are both in our portfolio.
“Investors are clamoring for information on these subjects,” Kelly said. “The investors and money managers do not have to be knowledgeable about the specifics of the science, but if they hold investments in the healthcare sector, they will want to hold some in companies that are on the cutting edge and have the potential for high growth. We want to make sure Kelly ETFs are on the forefront.”
Kelly ETFs is a new, Denver-based firm that has launched three ETFs, including the one focused on gene editing, The ETF invests in companies that are changing the genomic and life science industries. The fund seeks to track the Strategic CRISPR & Gene Editing Technology Index, which measures the performance of developed market companies that specialize in DNA modification systems and technologies. There is no investment minimum.