Latest Tech Megatrend ETF Monthly Report | HANetf

Tech Megatrends ETF: Key Takeaways | February

 

  • ITEK globally well diversified – underweight FAANGS & Magnificent 7. 
  • Equal weight across 8 subthemes (12.5% per theme; 120 total holdings, 15 per subtheme).
  • ITEK broader than GICS classification – includes EVs, Gaming/Streaming, Social Media (excluded by Tech Indices). 
  • ITEK retreated -7.6% in January but has recovered well in February; follows 45.7% in 2023.
  • Well positioned for broader Tech rally in 2024.
  • Benefits as Global Digital convergence increases – large M&A deals likely in 2024.
  • Social Media, Cloud, AI, Cybersecurity, EVs, Robotics, Streaming all interlinked – boosting usage & deals.
  • Best Subthemes 2023: Blockchain 19.4%, Robotics & Automation 6.8%, Genomics -0.6%, Cyber Security 5.6%, Future Cars 2.3%, Digital Entertainment 4.9%, Cloud Computing 5.0%, Social Media 3.3%. 
  • Far lower P/E ratio, Price/Book & Price/Sales - versus Nasdaq.  
  • Top holdings equal weight – so far less concentrated than Nasdaq & most Tech funds in FAANGS.
  • Global mix: US 60.9%, China 10.7%, Japan 8.3%, Germany 4.1%, Canada 2.7% & Australia 3.1%. 
  • Unlike almost 100% US centric Nasdaq & other Tech Indices/Funds.
  • Top 15 leaders for each Megatrend subtheme – all established firms.
  • Top 5 holdings less than 8% weight; Top 10 under 15%.   Nasdaq approaches 37% & 52% respectively.
  • Mega-Cap weight under 7% (Nasdaq 49%).

 

Source of all data: Gins Global / Bloomberg as of 31/01/2024. Additional sources available upon request. Please note that all performance figures are showing net data. Past performance is not indicative of future performance and when you invest in ETFs, your capital is at risk.

Macro Outlook

  • The majority of tech stocks below 2021 levels, undervalued versus Magnificent 7.
  • Convergence of Tech across, AI, Cloud, Social Media, Gaming and Cybersecurity.
  • Big AI spending boosting Big Tech values & Cloud providers.
  • Over $2tn spending in AI expected within this decade.  Expect more M&A deals. 
  • Upcoming Fed rate cuts – tailwind for disruptive Tech stock valuations.
  • Broader Tech rally beginning – enjoying positive rerating, beyond Magnificent 7.
  • Low P/Es – attractive valuations. Quality Megatrend holdings amongst lowest P/Es in years.
  • Online gaming dominated by mobile – boosting Digital Entertainment/Videos (see chart). 
  • Social Media boosted via gaming & video streaming to mobile (expected to double in 3yrs).
  • US Chips Act & $1tn Infrastructure Bill boosts EVs and onshoring IT trend.
  • Fast adoption of OpenAI - ChatGPT & BARD AI – boosts Cloud usage.
  • EVs more mainstream across Europe & US – 15% planned within 2yrs with US big subsidies. 
  • Blockchain rerating as tokenization ledger adoption to increase in financial services.

 

Source of all data: Gins Global / Bloomberg as of 31/01/2024. Additional sources available upon request. Please note that all performance figures are showing net data. Past performance is not indicative of future performance and when you invest in ETFs, your capital is at risk.

 

Subtheme Returns - January

Contribution

Contribution (%)

Average Return (%)

Sum of Weight (%)

Blockchain

-4.83%

-26.64%

15.86%

Robotics & Automation

-0.23%

-0.05%

13.67%

Genomics

-0.61%

-5.75%

10.21%

Cyber Security

-0.02%

-1.24%

14.19%

Future Cars

-1.70%

-17.19%

9.48%

Digital Entertainment

0.48%

6.53%

12.25%

Cloud Computing

0.25%

1.78%

12.07%

Social Media

-0.94%

-7.56%

12.37%

 

 

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

 

Largest Contributors - January

HOLDINGS

Index Category

Contribution (%)

Return (%)

Average Weight (%)

NVIDIA CORP

Robotics & Automation

0.19%

24.24%

0.93%

CROWDSTRIKE HOLDINGS INC

Cyber Security

0.17%

14.56%

1.40%

PALO ALTO NETWORKS INC

Cyber Security

0.14%

14.80%

1.08%

SPOTIFY TECHNOLOGY SA

Digital Entertainment

0.14%

14.60%

1.08%

NETFLIX INC

Digital Entertainment

0.14%

15.86%

0.95%

KONAMI GROUP CORP

Digital Entertainment

0.13%

23.61%

0.82%

CAPCOM CO LTD

Digital Entertainment

0.11%

23.90%

0.70%

SAP SE

Cloud Computing

0.11%

15.29%

0.94%

IBM CORP

Cloud Computing

0.10%

12.30%

0.95%

INTUITIVE SURGICAL INC

Robotics & Automation

0.10%

12.11%

0.94%

DRAFTKINGS INC

Digital Entertainment

0.10%

10.78%

0.99%

MARVELL TECHNOLOGY INC

Robotics & Automation

0.10%

12.25%

0.92%

META PLATFORMS INC

Social Media

0.09%

10.22%

1.03%

TREND MICRO INC

Cyber Security

0.08%

12.67%

1.06%

NINTENDO CO LTD

Digital Entertainment

0.08%

12.92%

1.02%

SERVICENOW INC

Cloud Computing

0.08%

8.34%

1.02%

FORTINET INC

Cyber Security

0.08%

10.18%

0.84%

ZSCALER INC

Cyber Security

0.07%

6.37%

1.20%

CYBERARK SOFTWARE

Cyber Security

0.07%

6.59%

1.11%

SALESFORCE INC

Cloud Computing

0.06%

6.82%

1.00%

NORTHERN DATA AG

Blockchain

0.06%

6.46%

1.32%

MICROSOFT CORP

Cloud Computing

0.05%

5.73%

0.97%

 

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

  

Tech Megatrends ETF Performance
 
As of 31.01.2024

 

1M

3M

6M

YTD

12M

2Y

3Y

SI

HAN-GINS Tech Megatrends Equal Weight UCITS ETF

-7.57%

17.47%

-7.36%

-7.57%

16.22%

-13.59%

-22.54%

49.61%

Solactive Innovative Technologies Index (NTR)

-7.59%

17.72%

-7.08%

-7.59%

17.13%

-13.28%

-21.99%

52.57%

 

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 31/01/2024

Performance before inception is based on back tested data. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. 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. When you invest in ETFs and ETCs, your capital is at risk.

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