Joining us now is Stephen Gardner, director at E.
T F Managers Group, which is the issuer of the germy TF,
giving investors access to vaccine stocks as well as testing stocks.
Steven, thank you so much for joining us today.
Two of the more notable vaccine stocks Moderna and Biontech are
among your firm's six largest holdings in your German Dex.
What moves your firm considering as both stocks slid considerably yesterday?
Yes, so I think the you know,
over the last few months there's been a huge slide to the downside,
with a lot of these names with a kind of excitement over
getting out of this pandemic and away from these lockdowns and whatnot.
But it's really been from a shift of this exuberance that we
saw early on in the pandemic from a lot of these names
going towards.
Now we're looking at as investors,
looking at more of the businesses and their ability to perform
rather than just the hype of of some of these,
uh, these high flying vaccine mates.
You know, it's not just those two stocks. It's the entire vaccine market.
Last week, Dr.
Fauci saying the us is getting past the quote full blown pandemic phase of COVID-19.
So what should investors know when it comes to epidemics in
the us before they rush to sell the vaccine stocks?
Yes, so there's a long history of epidemics and pandemics, uh, you know,
30 plus in the past, the past 50 or so years.
So there's there's certainly precedent for it.
But, you know, this one hit us a lot harder, and there is obviously not a
proper preparation for it. And it's a very reactionary measure as to be expected.
But I think we've learned from this substantially so going forward.
You know, these vaccine makers have shown a great way to fight this,
fight this pandemic and create proper remedies for it
and then on the treatment on the testing front,
too.
You know,
there's been a supply demand imbalance
throughout the pandemic of testing companies.
I think, you know, a lot of the US names have really risen to the occasion.
But with the absent flows of new variants has been
difficult to gauge what proper inventories need to be.
Do you think that some vaccine stocks are more vulnerable than others like Moderna,
for example, which it's only commercial product right now is it's covid vaccine.
Yeah, I think so.
Companies like that who have their only commercial product in
the market is covid vaccine are more or more,
you know, you know, susceptible to you know,
EBS and flows and volatility than the likes of fighter.
He's got a, you know, a long range of commercial drug products.
Um, but keep in mind, Moderna also has, you know, 15 clinical stage products
that are that are that they're working on
right now with how well capitalized they are.
You know, they do have a long runway to be able to, uh, you know,
push those through the FDA and hopefully get those two commercial levels.
And we know the biggest wave of a micron is behind us.
But in some places in New York City, for example, are still requiring vaccine proof.
I actually went somewhere yesterday that required proof of a booster.
So is this make vaccines worthy of holding investorsportfolios?
Are there any new vaccine news coming down
the line that investors should be aware of?
I think overall what we're going to see is that these these vaccine names in
terms of the covid and the ones that are more pure play just vaccination.
Companies like, you know,
the bio index of the world and Moderna's are going to hinge on the fact that you know,
they're going to need, you know, demand on a seasonal level,
which is what What we've been seeing as an expectation,
you know, things are still up in the air on where we're going to go from here.
But the expectation is that seasonally,
there might be a continual uptick in code cases, but at a less severe level.
So,
um, you know, I think one thing about that is the, you know, the code front.
You know, the vaccines are important,
but a lot of these companies are using their seminar mm M RNA technology,
for example,
and going and trying to use that for things like cancer treatment.
You know, fighter just bought trillium, their immune oncology
company with a lot of innovative products looking at treatment for cancer.
So I think the seminar M RNA is not a new
phenomenon is it's been worked on for the past 15 to 20
years and be able to use that technology outside of Covid
into things like cancer and biotech with a melanoma clinical trial.
Drugs.
So there's a number of things that it can be used for,
so it doesn't just hinge on on this pandemic.
Absolutely. That does sound a little bit further down the line here.
But in terms of short term investing strategy, when you hear news like you know,
these boosters are waning after a period of about four months,
how does information like that inform your firm's short term investing strategy?
So we're we're more long term focused, diversified play.
But I think in the short term, you know,
we we always speak to investors about having a being able to, you know,
go move through volatility.
Um, not necessarily going to single stock route,
but also diversifying in a basket within the E T f with our with our germy TF,
which breaks up between these vaccines,
the treatment companies and also the testing companies
to play the entire infectious disease bio pharma market.
So short term, we could see, you know, continue to move to the downside.
But on the long term, we think there's, uh, you know,
these companies are very innovative and they're going to
continue to solve problems that create investor value.
You mentioned testing companies and I know that the Jeremy
TF does have sizable investments in Labcorp and Quest,
which do tend to be less contingent and reliant on the COVID-19 pandemic.
Does your firm plan to adjust percentages
of holdings in those companies moving forward?
So we're strictly a rules based passive utf we're not making active decisions.
Uh, it is just rebalanced on a quarterly basis so that we're having, uh, you know,
diversified exposure to the entire market.
We're looking to access.
So, um, you know, the rebalancing is, you know,
bringing things back in line and making sure that, you know, if you know,
all boats rising, rising tide, that all of these names, you know will will go with it.
But we're not making active decisions on, you know,
one testing company over the other.
But we do have a pretty substantial
percentage of testing companies within the portfolio.
Steven, thank you so much for your time today.
That's Stephen Gardner, director at TTF Managers Group.