Published by Harvest Exchange Traded Funds 

Heart disease is one of the leading causes of death in Canada, claiming almost 44,000 lives each year.  In the U.S. about 610,000 Americans die of heart disease annually, about one in every four deaths, according to the Centre for Disease Control.

The numbers are part of a global trend that is seeing an increase in cardiac illnesses as populations age in developed countries. As the trend accelerates, more healthcare spending is being diverted to treat these diseases. Research is spurring innovations in surgical techniques that are less invasive and less expensive. Money is going into the development of drugs that manage symptoms. And medical technologies are evolving that are extending life spans.  

One area where drugs, devices, and technology are combining, is in the increasing use of pacemakers and implantable defibrillators. These life-saving devices are benefitting from advances that are lowering costs and improving treatments.  The Canadian Cardiovascular Society says more than 200,000 Canadians live with pacemakers or implantable defibrillators,  part of the larger global picture that is seeing more than 1 million of these devices implanted around the world each year.

The global market for pacemakers and implantable defibrillators was US $5.6 billion in 2016, according to California-based Grand View Research. Grand View sees demand growing at an annual rate of 7.2%. through the next decade.

As cardiovascular disease rises, more medical insurance plans are making coverage available.  This includes small steps in rapidly evolving emerging markets where healthcare systems are rudimentary. As the economies expand, more procedures and treatments will be covered.  

Two leaders in this field are Boston Scientific Corp. and Medtronic plc. Both offer a broad range of medical devices related to heart disease. 

The Medtronic LINQ Cardiac Monitor is a wireless device used by patients who need long-term monitoring of heart rhythm. It is the smallest device of its kind requiring an incision of less than half an inch to implant. (Medtronic photo)

 

Boston Scientific’s Cardio Rhythm and Neurological segment, which also includes these devices, accounts for about 30% of annual revenues. Boston Scientific reported its latest quarterly results  (October 24, 2018) It’s biggest revenue contributor – the cardiovascular unit that makes pacemakers, heart valves and stents – posted a 6 percent increase in sales to $908 million.

Both companies are benefitting from global trends in healthcare management and both are top holdings of the Harvest Healthcare Leaders Income ETF (TSX: HHL, HHL.U).  The ETF had 20 stocks as of October 31, 2018,  all global healthcare leaders with a minimum market capitalization of US$5 billion.  The fund has C$304.8 million in assets under management  (October 31, 2018) with a management fee of 0.85%. –  AM

 

To learn more about Harvest Healthcare Leaders Income ETF, click here: