Expect Further Rally in Nasdaq-100 ETFs as Moderna Joins

U.S. biotech company Moderna Inc. MRNA focused on drug discovery and development based exclusively on messenger RNA is in every news flash for the past few months due to its engagement in the coronavirus vaccine development. Not only this, clinical trials are showing success of the experimental vaccine. 

Per the latest news, Moderna’s vaccine for COVID-19 showed it was safe and triggered immune responses in all 45 healthy volunteers in an ongoing early-stage study. Moderna had conducted two tests in May and will begin phase 3 tests with 30,000 volunteers on Jul 27. 

Notable, Moderna shares have gained a whopping 283.6% this year, winning a place on the Nasdaq-100 with its sheer success. Moderna gained more than 4.5% in the key trading session on Jul 14 and added 16.1% after hours.

Currently, Moderna shares are valued at about $28 billion. The inclusion to the index will happen on Jul 20. The dual news of successful clinical trials and index inclusion made the Moderna stock a star performer this week.

More Rally Ahead for Nasdaq-100?

The Nasdaq-100 is home to the most-glamorous stocks of the year. The likes of Apple, Amazon, Tesla, eBay, Netflix and Zoom Video Communications Inc. all have a presence in this highly coveted index. The Nasdaq 100 broke into record territory early last month and has kept on marching northbound. So far this year, the Nasdaq-100 index is up more than 22% while the S&P 500 is down about 0.9%.

If you think that the tech stocks are the most crowded and overvalued bets currently and the Nasdaq-100 may record range-bound trading in the near term, the latest inclusion of Moderna may give you a reason to bet on the Nasdaq-100 ETF. If successful on all clinical trials, Moderna shares are sure to soar in the coming days.

The U.S. government is backing Moderna’s vaccine with about half a billion dollars and has chosen it as one of the first to enter large-scale human trials. A successful vaccine could be a trump card for Moderna, which never had a licensed product, per Reuters (read: Biotech ETFs to Shine on Pfizer's Coronavirus Vaccine Progress).

ETFs in Focus

Against this backdrop, below we highlight a few ETFs that could be tapped on a slew of good news from Moderna.

Nasdaq-100 ETFs

These ETFs include the likes of Invesco QQQ ETF (QQQ), First Trust NASDAQ-100 Equal Weighted Index Fund QQEW and ProShares UltraPro QQQ TQQQ (see all Style Box - Large Cap Growth ETFs here).

Moderna-Heavy ETFs

Apart from the Nasdaq-100, Moderna-heavy ETFs like Renaissance IPO ETF IPO, ETFMG Treatments Testing and Advancements ETF GERM, Principal Healthcare Innovators Index ETF (BTEC) and VanEck Vectors Biotech ETF BBH should also move higher. All these funds have assets in Moderna in the range of 5.17% to 6.51%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.