Invest in UN SDG Goal 3: Good Health and Well-being with ESG ETFs

The United Nations Sustainable Development Goals (SDGs) are 17 goals that all UN member nations have agreed to work towards achieving by the year 2030. They set out an ambitious mission to end all forms of poverty, hunger and disease. Health has a central place in SDG 3 “Ensure healthy lives and promote well-being for all at all ages”, underpinned by 13 targets that cover a wide spectrum of World Health Organization’s work. In this article we highlight how you can contribute to UN SDG Goal 3: Good Health & Well-Being with ESG Exchange-Traded Funds (ETFs).

17 SDGs for a better future

The Sustainable Development Goals (SDGs) are 17 goals with 169 targets set by the United Nations in 2015 as a global initiative to tackle issues that affect humans and the environment we live in, with the hope of achieving tremendous progress by 2030.

The 17 sustainable development goals (SDGs) to transform our world:

1. No Poverty
2. Zero Hunger
3. Good Health and Well-being
4. Quality Education
5. Gender Equality
6. Clean Water and Sanitation
7. Affordable and Clean Energy
8. Decent Work and Economic Growth
9. Industry, Innovation and Infrastructure
10. Reduced Inequality
11. Sustainable Cities and Communities
12. Responsible Consumption and Production
13. Climate Action
14. Life Below Water
15. Life on Land
16. Peace and Justice Strong Institutions
17. Partnerships to achieve the Goal

Each goal has several targets and is measured quantitatively by indicators provided by private and public entities. The creativity, knowhow, technology, and financial resources from all stakeholders are necessary to achieve the SDGs in every context. The beauty of these goals is their interrelation, meaning that action in one area will affect outcomes in others. The development of those goals must balance social, economic and environmental sustainability.

UN SDG GOAL #3: Good Health and Well-being

Health and well-being are essential at all ages and are key factors in attaining sustainable development. In 2020, the world faced the COVID-19 pandemic, a global disease that took the lives of 5 million people, destabilized world economies and disrupted the daily lives of billions of people around the globe.

Prior to the pandemic, major progress was made in improving the quality of lives and health of millions of people. Significant financial and human capital was put together in increasing life expectancy and reducing some of the most common diseases and illnesses associated with child and maternal mortality.

However, additional efforts must be made to fully eradicate a wide range of diseases and address many different lingering and emerging health issues. To make significant progress in helping save lives, all stakeholders (governments, companies and non-governmental organizations) need to work together in providing more efficient funding of health systems, improved sanitation and hygiene, and increase access to physicians.

These actions are embedded in the United Nations 3rd Sustainable Development Goal "Good Health and Well-Being" and include 13 associated targets that aim by 2030 to:

1. Reduce global maternal mortality
2. End preventable death of new-borns and children
3. End epidemic of AIDS, tuberculosis, malaria and other diseases
4. Reduce premature mortality, promote mental health and well-being
5. Eliminate drug abuse and excessive alcohol consumption
6. Halve the number of global deaths and injuries from road traffic accidents
7. Focus on improving reproductive healthcare services
8. Provide universal health coverage and access to essential services and products
9. Reduce deaths and illnesses from hazard chemicals, pollution and contamination
10. Reduce tobacco usage
11. Support R&D of vaccines and medicines for diseases in developing nations
12. Increase recruitment of qualified health workforce in developing nations
13. Strengthen early warning, risk reduction and management of global health risks

The United Nations along with other stakeholders have put together hundreds of actions to achieve these targets and have established statistical indicators that track their progress.

Investors can join the effort to promote SDG 3: Good Health & Well-being with ESG ETFs

The world of investing has always been about making money, but things are changing. Investors are becoming more socially and environmentally conscious, and their investment goals have split between expanding their wealth and making a positive impact on the world around them.

Today, impact investing has become the norm, with billions of dollars flooding the market in adequately screened investments, focusing on entities that align their operations with SDG and ESG initiatives (Environmental, Social, Governance). Corporate Social Responsibility departments (CSR) went from being a cost burden to an existential necessity that represent employees and consumers values.

The change in investors' mindsets has given birth to mutual funds and ETFs that provide exposure to securities that work towards achieving ESG or SDG goals. This allows them to invest in opportunities that can provide wealth accumulation while making an impact.

List of SDG ETFs promoting Good Health & Well-being

Trackinsight analyzes the fact sheets and other publicly available information of all ETFs in the ESG universe. The information is screened for statements that show an explicit tilt towards specific sustainable development goals.

In relation to "Good Health and Well-Being" goal, Trackinsight identifies 7 ETFs:

• iShares Healthcare Innovation UCITS ETF (HEAL)
• iShares Ageing Population UCITS ETF (AGED)
• Robo Global Healthcare Technology and Innovation ETF (HTEC)
• L&G Healthcare Breakthrough UCITS ETF (XMLH)
• L&G Pharma Breakthrough UCITS ETF (ETLI)
• Rize Medical Cannabis and Life Sciences UCITS ETF (FLWR)
• IQ Healthy Hearts ETF (HART)

iShares Healthcare Innovation UCITS ETF (HEAL)

HEAL ETF recognises the major structural drivers including shifting global demographics, social changes and the increased application of technology. It invests in companies across the world that are focused on innovation within global healthcare services, across both developed and emerging markets. HEAL is well diversified with 197 holdings but has high concentration on US equities (71%) and the Healthcare industry (98%). As of October 13th, 2021, the top holdings include:

1. Dexcom Inc (Glucose Monitoring, 1.29%),
2. Biohaven Pharmaceutical Holding (Clinical-stage biopharmaceutical company ,1.25%)
3. Thermo Fisher Scientific Inc (Lab Equipment and Supplies, 1.16%)
4. Quidel Corp. (Diagnostic healthcare products, 1.12%)
5. Sysmex Corp. (Diagnostic solutions, 1.11%)

Since inception on September 8th, 2016, HEAL has grown to over $2.3 billion in assets under management and generated over +93% in cumulative returns. The fund trades on multiple exchanges and charges 0.4% in annual fees.

iShares Ageing Population UCITS ETF (AGED)

AGED is another iShares ETFs aligned with the SDG goal #3. The fund specifically targets companies that provide products or services to the world’s ageing population (defined as people aged 60 years or above). The fund has 358 holdings, and is diversified across sectors (Healthcare 46%, Financials 38%, Consumer discretionary 10%) and countries (United Stated 50%, Japan 7%, United Kingdom 5%).

As of October 13th, 2021, the top holdings include:

1. Biohaven Pharmaceutical Holding (Clinical-stage biopharmaceutical company ,0.54%)
2. IHH Healthcare (Upmarket health service, 0.51%)
3. Alkermes (Biopharma specialized in neuroscience and oncology, 0.50%)
4. LPL Financial Holdings (Investment and wealth management, 0.50%)
5. AMN Healthcare Inc (Temporary healthcare staffing company, 0.50%)

Since inception on September 8th, 2016, AGED has grown to over $948 million in assets under management and generated over +50% in cumulative returns. The fund trades on multiple exchanges and charges 0.4% in annual fees.

Robo Global Healthcare Technology and Innovation ETF (HTEC)

HTEC is the result of 5 years of research on healthcare and life sciences companies as part of Robo Global robotics, automation and AI investment strategies. This fund invests in 50 to 100 healthcare technology and innovation companies in the U.S. (82%) and around the world by tracking the ROBO Global® Healthcare Technology and Innovation Index. As of October 13th, 2021, the fund has 87 holdings including:

1. iRhythm Technologies Inc (Cardiac monitoring technology, 2.30%)
2. Dexcom Inc (Glucose Monitoring, 1.60%),
3. Thermo Fisher Scientific Inc (Lab Equipment and Supplies, 1.60%)
4. Insulet Corp (Insulin infusion systems, 1.57%)
5. Vocera Communications Inc (Communication and workflow optimization,1.52%)

Since inception on June 25th, 2019, HTEC has grown to over $225 million in assets under management and generated over +80% in cumulative returns. The fund trades on the New York Stock Exchange (NYSE) and charges 0.68% in annual fees.

L&G Healthcare Breakthrough UCITS ETF (XMLH)

XMLH tracks the same index as HTEC and has similar exposures in terms of sectors countries and companies. Since inception on July 2nd, 2019, the fund grew to $210 million in assets and generated over +82% in cumulative returns. XMLH trades on multiple European exchanges including the London Stock Exchange, Borsa Italiana, Deutsche Börse and SIX Swiss Exchange and charges 0.49% in annual fees.

L&G Pharma Breakthrough UCITS ETF (ETLI)

L&G Pharma Breakthrough UCITS ETF (ETLI) is another LGIM fund aligned with the third Sustainable development goal. Unlike XMLH, this fund invests in companies involved in research, development and manufacture of orphan drugs. An “orphan drug” is a pharmaceutical product that has been developed specifically to treat rare diseases or disorders.

ETLI has a pure exposure to the healthcare sector and its 33 holdings are mainly domiciled in the U.S. (55%), Japan (10%) and Switzerland (6.5%). Its top constituents are:

1. Endo International (Generics and specialty branded pharmaceutical, 5.4%)
2. Sarepta Therapeutics (medical research and drug development company, 4.1%)
3. Kyowa Kirin (Specialty drugs developer, 3.6%)
4. Grifols (Leader in blood plasma-based products, 3.5%)
5. Supernus Pharmaceuticals (Pharma specialized in drugs that treat central nervous system diseases, 3.5%)

It's a smaller fund with $34m in AuM and trades similarly on multiple European exchanges. Since inception on January 23rd, 2018, the fund has gained around +25%.

Rize Medical Cannabis and Life Sciences UCITS ETF (FLWR)

Rize investment team has recognized cannabis's potential to help millions of people globally and the importance of giving investors access to an industry that produce an increasingly accepted product, known to treat symptoms associated with multiple sclerosis, certain types of cancer and rare syndromes. FLWR ETF invests in companies in the biotechnology/pharma and hemp and cannabidiol (CBD) sectors, set to benefit from rising adoption of medical cannabis. Its 29 holdings include:

1. Jazz Pharmaceuticals (Biopharma, 16.8%)
2. ScottsMiracle-Gro (Provider of gardening resources, 15.71%)
3. Amyris (Synthetic biotechnology and renewable chemical company, 11.27%)
4. GrowGeneration (Hydroponic and organic specialty gardening retailer, 11.25%)
5. Arena Pharmaceuticals (Biopharma, 7.98%)

Since inception on February 12th, 2020, the fund has grown to $42 million in AuM and has generated +28% in returns. The ETF currently trades on the London Stock Exchange, Deutsche Börse and SIX Swiss Exchange and charges 0.65% in annual fees.

IQ Healthy Hearts ETF (HART)

HART is a niche ETF that invest in companies that help people prevent cardiovascular disease by allowing them to adopt healthier lifestyles, as well as companies providing cutting edge treatment of those diseases. Its 80 constituents include:

1. Merck & Co. (Pharmaceutical company, 5.4%)
2. AstraZeneca PLC (Pharmaceutical and Biotechnology company, 5.4%)
3. Novo Nordisk (Healthcare company focused on obesity and diabetes, 5.1%)
4. Nestle SA (Food and Beverage company, 5.0%)
5. Alphabet A (Technology conglomerate, 5.0%) 

The $6.8 million fund was launched on January 14th, 2021 and has generated +11% in returns since then. HART trades on the NYSE Arca and has an expense ratio of 0.45%.

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