3 Funds Fighting Coronavirus with the Help of Cloud and AI

Zacks Equity Research
Updated

The coronavirus outbreak is certainly weighing on the broader markets and putting immense pressure on biotechnology and pharmaceutical firms to come up with a vaccine as soon as possible. To meet their goal, researchers are now implementing at length AI tools and related technologies. The initiative has brought technology giants and these firms together, as they work toward their common goal of looking for a treatment.

Thus, mutual fund investors could consider investing in funds that put their assets in these companies, which harness the power of AI and cloud technologies.

AI Assistance in Healthcare

The virus outbreak, which was first reported in Wuhan, China, about four months ago, has sent the world into adopting extreme social-distancing measures. The number of infected and casualties are rising everyday globally as potential vaccines and drugs are being formulated to combat the disease. AI and related technologies have been put to good use to speed up the process or assist with similarly relevant tasks.

For example, scientists at the University of Copenhagen are thoroughly employing AI to compute which COVID-19 patients require intensive care and ventilators. The system takes into account certain symptoms that serious patients have in common (along with X-rays, tests and health records, etc.) and feed the same into a supercomputer. This, in turn, is used to calculate how many patients need to use ventilators and then plan accordingly.

Additionally, AI-driven drug discovery platforms are being used. UK company Exscientia is making the most of its AI-enabled drug discovery platform to analyse about 15,000 probable COVID-19 treatments with the American research institute Calibr and the non-profit synchrotron company Diamond Light Source.

Companies, namely Alibaba Group Holding Ltd. (BABA), Microsoft Corporation (MSFT) and Alphabet Inc. (GOOGL) made a considerable progress in AI and cloud-based technologies that are now being used in diagnostic technologies to detect and confirm coronavirus in patients showing the symptoms. Alibaba’s Alibaba Cloud, DingTalk and DAMO Academy have come together to launch several AI technologies and cloud-based solutions for diagnostic purposes.

Microsoft’s Healthcare Bot service enables healthcare companies to build and implement an AI-powered, accommodating, conversational healthcare platform for patients. Finally, Alphabet’s subsidiary DeepMind AI is assisting to understand the characteristics of the novel coronavirus, which comprise of its genetic sequence etc.

3 Funds to Buy

We have, therefore, selected three mutual funds that invest in some of the aforementioned companies. All of these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or #2 (Buy). In addition, the minimum initial investment for these funds is within $5,000.

We expect these funds to outperform peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.

The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Janus Henderson Global Technology and Innovation Fund Class A JATAX aims for capital appreciation over a long period. The fund invests the majority of its assets in securities of companies that the fund’s managers believe will gain from advancement in science and technology. The fund invests a smaller portion of its assets in securities of non-U.S. companies. Microsoft and Alibaba are among the fund’s top holdings.

This Zacks Sector – Tech has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

JATAX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 1.01%, which is below the category average of 1.29%. It has returned 21.4% over a year. The fund has a minimum initial investment of $2500.

BlackRock Technology Opportunities Fund Investor A Shares BGSAX aims for long-term capital growth. The fund invests the majority of its assets in securities of U.S. and foreign technology companies with diverse market capitalizations. The fund invests in common stocks of companies along with preferred stocks and convertible securities. Microsoft, Alphabet and Alibaba are among the fund’s top holdings.

This Zacks Sector – Tech has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

BGSAX carries a Zacks Mutual Fund Rank #2 and has an annual expense ratio of 1.18%, which is below the category average of 1.29%. It has returned 24.4% over a year. The fund has a minimum initial investment of $1000.

Ivy Science And Technology Fund Class A WSTAX aims to offer capital growth. The fund invests the majority of its assets in securities of companies in the technology space. The non-diversified fund invests across companies of any size and may also invest in securities of U.S. and non-U.S. issuers alike. Microsoft and Alibaba are among the fund’s top holdings.

This Zacks Sector – Tech has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

WSTAX carries a Zacks Mutual Fund Rank #2 and has an annual expense ratio of 1.19%, which is below the category average of 1.29%. It has returned 18.5% over a year. The fund has a minimum initial investment of $750.

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Click to get this free report Get Your Free (JATAX): Fund Analysis Report Get Your Free (WSTAX): Fund Analysis Report Get Your Free (BGSAX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research