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The BITA Covid-19 Vaccine Giants Index (BC19VI) is the definitive stock market index for WHO-approved companies that are in the frontline for developing therapies and vaccines for combating coronavirus. At a time when the global pandemic has practically altered all facets of human living, BC19VI provides investors with the chance to gain exposure to companies that are working on providing a long-lasting solution going forward. BC19VI was launched on the 27th of November 2020 by BITA, a reputable German-based FinTech company, which also maintains the index.
Covid-19 Vaccine Giants Index launched with a value of 1000 at inception. The index quickly edged higher to above 1090 in early December 2020, but it failed to sustain early momentum and dropped to lows of circa 950 by the end of 2020. It, however, started pushing higher at the turn of 2021 and managed to print its all-time high, yet (as of March 2021), at circa 1200 in early February. Concerns that included, among others, the administration and distribution of COVID19 therapies triggered retracements to around 1000, but the index displayed resilience and continued to stay above 1050 as of March 2021.
BC19VI is a free-float market-capitalisation weighted index that is calculated using the standard Laspeyres formula. A free float index takes into account only outstanding shares held by the public, where the underlying market capitalisation determines the weight of any constituent. There is also a unique divisor applied to ensure that the index’s value maintains continuity across different company changes, such as unforeseen corporate actions. The Covid-19 Vaccine Giants Index has a weight cap of 9% on any one constituent, and any excess weight is distributed proportionally among all other constituents until that condition is achieved. The index is calculated up to 13 decimal places for accuracy purposes but is rounded off to 2 decimal places for publishing and dissemination purposes.
For a company to be considered for inclusion in the BC19VI, it must meet the following conditions to warrant inclusion:
The BC19VI index is rebalanced quarterly, at the close of business, on the third Friday of March, June, September, and December. The final date of determination (price values or conditions considered by constituent companies) is 5 business days before the rebalancing date.
Here are the current top 10 BC19VI constituents as of March 2021:
|
Constituent |
Weight |
|
AstraZeneca PLC .2for1 ADR |
9.19% |
|
Novartis Class “B” Spn 1for1 ADR |
9.18% |
|
Johnson & Johnson |
9.16% |
|
Pfizer |
9.08% |
|
GlaxoSmithKline PLC 2for1 ADR |
8.99% |
|
Merck & Company |
8.99% |
|
Sanofi SA 2for1 ADR |
8.90% |
|
Novavax |
8.80% |
|
Moderna |
8.79% |
|
Grifols SA 1for1 ADR |
5.44% |
COVID-19 triggered the worst recession since the great depression and literally shut down economies as well as killed off entire industries. The only hope for investors lies in the hands of big pharmaceutical companies because the only way back to normalcy was through widespread vaccination of populations. With billions of doses set to be produced and administered, the task was too big for any one company to handle. The process of vaccine development and approval is typically long and drawn out, but these were extraordinary times, and everything was fast-tracked. This made news coverage an important catalyst for price changes in the BC19VI. The prices of Covid-19 Vaccine Giants Index constituents spiked anytime an approval was secured by a body, such as the FDA (Food and Drug Administration).
After approval, it is clinical trials that triggered price changes, with positive news inspiring higher prices, while negative news weighed down on prices. During the administration of vaccines, initial claims of blood clotting concerns, especially with the vaccine produced by AstraZeneca, pressured the index lower, but ongoing positivity stabilised prices. During the COVID-19 period, vaccine and other therapy service providers have benefitted from an improved regulatory review process. However, if regulatory concerns kick in going forward, BC19VI may see more price volatility. There is also the issue of supply concerns, which will hinder effective vaccine administration and distribution around the world. For investors, another long-term source of risk would be unanticipated long-term negative side effects of vaccines and other therapies, as well as the possibility that other types of reliable and effective remedies may be launched by other companies.
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