The stock market value of Roche reached an all-time high on 28 April 2020. Although the sell-off caused by the pandemic initially pulled the pharmaceutical group down with the rest, the SMI heavyweight recovered all its losses within no more than 6 weeks. While not all stocks in the sector by any means are soaring to such heights, Roche is a model example of the "immunity" of the pharmaceutical industry to the current crisis. The sector owes this relative strength in part to its defensive qualities. Again, Roche is a good example: in the middle of the coronavirus turbulence, the Basel company distributed just under CHFbn 7.8 to its shareholders, thereby delivering the 33rd dividend increase in succession. Roche is at the same time fully engaged in the fight against coronavirus. The Swiss company is one of a phalanx of international pharmaceutical and biotech companies searching for an effective treatment for Covid-19.
This is exactly where the new tracker certificate on the Swissquote Pharma Opportunity Index comes in. With this participation product Leonteq is responding to the momentum in the health sector. In the process the issuer is once again drawing on the expertise of Swissquote. The equity strategists of the online broker conceived of the underlying stock as part of its "Themes Trading" series. The universe of the Swissquote Pharma Opportunity Index comprises companies with significant business activities in the pharmaceutical industry. From this population the experts select firms which are working actively on drugs to combat Covid-19 and on research into vaccines. To support the selection process, the index sponsor employs an array of quantitative calculations, including in particular portfolio optimisation. The composition of the index is reviewed quarterly. In addition to the regular rebalancing, the index sponsor can add new members to the group in response to stock market listings or positive news, for instance.
The starting line-up of the Swissquote Pharma Opportunity Index contains 22 equities. Alongside the fore-mentioned Roche, Novartis and the investment company BB Biotech are keeping the Swiss flag flying high. The majority of members are based in the USA and include Gilead Sciences. In the USA the company has received fast-track approval for the Remdesivir active agent for the treatment of Covid-19 in hospital patients. Roche is actively involved both in the search for active agents and in testing. In early summer the Basel company hopes to present results from the clinical study of the treatment of pulmonary disease with the arthritis drug Actemra. A test that allows antibodies of the pathogen to be detected is already on the starting blocks.
In addition to the known industry giants, a raft of smaller stocks have made it onto the benchmark. Biontech is one such example. The Mainz company launched the first clinical study for a coronavirus vaccine in Germany on 23 April, since when the candidate BNT162 has been dispensed to test subjects. Biontech is cooperating with Pfizer. Together with the US group, the company is looking to begin studies of BNT162 in the USA as well in the near future. During the coronavirus pandemic Biontech's share price experienced extreme fluctuations in response to news reports. It is precisely because of the high volatility and the risk associated with possible setbacks in research that a diversified position in this investment sector makes sense. With a tracker certificate from Leonteq, investors can add the Swissquote Pharma Opportunity Index to their portfolio. The product does not just allow investors to share in the performance of the underlying stock: the net dividends of the companies included are also reinvested in the index. Listed on the SIX Swiss Exchange, the tracker certificate comes with a management fee of 0.80% p.a.
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