Tech Megatrend Monthly Report | June

13 June 2022

 Equally Weighted ETF Monthly Report: Key Takeaways

  • Equal weighting 115 holdings has ensured less losses than more concentrated Fund competitors.
  • WFH digitalization trend not ending - boosting Cloud, Cybersec and Digital Entertainment usage.
  • ITEK’s holdings approved for EU’s Article 8 ESG screening.
  • Top subtheme contributors this month - represent Robotics (6.1%), Future Cars (5.4%) and Digital Entertainment (3.3%).  
  • Best performing holdings dominated by Future Cars and Robotics holdings: (see Table).ITEK’s global mix reduces volatility - US weight 58.3%, China 16.0%, Germany 2.8%, Japan 7.4%, South Korea 3.2%.
  • ITEK’s Top 5 holdings equal only 6.7%, and Top 10 under 13% of the portfolio. 
  • ITEK’s FAANG weight is under 7% and all holdings are equal weighted (Source: Morningstar)
  • For 2022 – all subthemes are down, Blockchain has been the weakest performer. Genomics, Cloud and Social Media have been relatively stronger.
  • Future Cars, Digital Ent, Cloud, Cybersec, Robotics & Genomics have contributed to ITEK losses of around 3% - 4% each.  Cybersecurity market set to almost double within 5 years (Chart). [1]

Please note that all performance figures are showing net data. Past performance is not indicative of future performance. Source of all data: Gins Global.

  

 

Macro Outlook

  • WFH/COVID & Ukraine War - continue to fast-track EV car adoption, Cybersecurity, Digital Entertainment & Cloud spending.
  • Global EV car market share – being boosted by $120+/barrel oil.  (China, US & EU) [2] 
  • Inflation & higher interest rates have indiscriminately hurt growth stocks across the board.
  • As inflation numbers top out (possibly by 3rd/4th qtr) – we expect Tech to bounce back, particularly ITEK holdings with strong earnings and balance sheets. [3]
  • Prior PE multiples were too high – currently at attractive levels. Tech growth industry fundamentals have not changed. Cloud projections show strong growth. [4]
  • Cheaper Tech stocks – we expect more M&A activity in 2021-22 due to lower multiples.
  • Google acquired Mandiant for $5.4bn - boosting its Cloud security capability. [5]
  • Cloud computing set to double revenues by 2028 – boosted by WFH & Cybersecurity. [6]
  • Over 50% of Enterprise IT Spending to shift to the Cloud by 2025. [7]
  • Netflix and Sony both acquired Gaming companies in the past few months. [8]
 

 

May - Subtheme Returns

Contribution

Total Return (%)

% Average Weight

% Performance of Category

Blockchain

-2.62

9.09

-28.82

Robotics & Automation

0.84

13.80

6.09

Genomics

0.14

15.39

0.91

Cybersecurity

-1.43

12.65

-11.30

Future Cars

0.76

14.11

5.39

Digital Entertainment

0.42

12.73

3.30

Cloud Computing

-0.12

14.77

-0.81

Social Media

-0.48

7.36

-6.52

Source of all data: Solactive. Past performance is no guarantee of future performance

 

HOLDINGS

Index Category

Average Weight (%)

Total Return (%)

Contribution to Return (%)

BIT MINING LTD - SPON ADR

 Blockchain

0.64

27.54

0.19

ADVANCED MICRO DEVICES

 Robotics & Automation

0.85

19.11

0.14

BYD CO LTD-H

 Future Cars

1.15

18.75

0.21

VMWARE INC-CLASS A

 Cloud Computing

1.02

18.57

0.20

ON SEMICONDUCTOR

 Robotics & Automation

1.00

16.45

0.15

KUAISHOU TECHNOLOGY

 Digital Entertainment

0.82

13.87

0.12

BAIDU INC - SPON ADR

 Cloud Computing

0.89

13.03

0.13

BAIDU INC-CLASS A

 Cloud Computing

0.98

12.95

0.14

MICROCHIP TECHNOLOGY

 Robotics & Automation

1.09

11.89

0.12

LUCID GROUP INC

 Future Cars

0.69

11.62

0.08

NXP SEMICONDUCTORS NV

 Future Cars

1.06

11.04

0.11

VOLKSWAGEN AG-PREF

 Future Cars

0.87

10.98

0.09

SPOTIFY TECHNOLOGY SA

 Digital Entertainment

0.75

10.94

0.08

MEDIATEK INC

 Robotics & Automation

0.82

10.66

0.09

NETEASE INC

 Digital Entertainment

1.09

10.53

0.12

ANALOG DEVICES INC

 Future Cars

1.11

9.58

0.10

 

Past performance is no guarantee of future performance. Source of all data: Solactive.

 

Equally Weighted ETF and Index Performance (As of 31.05.2022)

 

1M

3M

6M

YTD

1Y

2Y

3Y

SI

HAN-GINS Tech Megatrend UCITS ETF

-2.52%

-17.99%

-34.93%

-30.48%

-30.56%

15.17%

45.12%

39.97%

Solactive Innovative Technologies Index (NTR)

-2.48% 

-18.57%

-35.32%

-30.92%

-30.81%

15.34%

46.07%

41.26%

Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. Source: Bloomberg / HANetf. Data as of 31/05/2022. Please note that all performance figures are showing net data. 

* The SFDR classifications for the funds are documented in their respective supplements and approved by the Central Bank of Ireland. The supplement for each fund can be found on their respective product page.

Learn more about our Equally Weighted ETF 

 

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