Tech Megatrend ETF Monthly Report | November

Tech Megatrends ETF Key Takeaways[1]  | November

• ITEK benefiting as Global Digital convergence increases - Megadeal Microsoft-Activision $75bn approved.
• Social Media, Cloud, AI, Cybersecurity, EVs, Robotics, Streaming all interlinked – boosting usage & deals.
• Tech Megatrends ETF up 14.6% in 2023 (8.6% past 1yr); boosted by AI, Blockchain & EVs. 
• Strong rebound in November as Fed pauses on rate hikes.
• Global mix: US 59.2%, China 14.5%, Japan 7.6%, Germany 3.8%, Canada, 2.4%, & Australia 3.1%. 
• Unlike Nasdaq & many Tech Indices/Funds remaining close to 100% US.
• Top 15 leaders for each Megatrend subtheme – all established firms.
• Far lower overall P/E ratio, Price/Book & Price/Sales versus Nasdaq.
• Fast-tracking adoption rates across 8 subthemes.
• Top holdings equal weight – so far less concentrated than Nasdaq & most Tech funds in FAANGS.
• Set to benefit from broader Disruptive Tech stock rally. 
• Top 5 holdings less than 6.5% weight; Top 10 @ 11.5%.   Nasdaq approaches 35% & 50% respectively.
• MegaCap weight under 7% (Nasdaq 47%).
• ITEK globally well diversified - underweight FAANGS & Magnificent 7. 
• Equal weight across 8 subthemes (12.5% per theme; 120 holdings).
• Best Subthemes for October: Blockchain during a tough month for Tech largely due to Fed uncertainty.
• Best Subthemes YTD: Blockchain dominated, followed by Robotics-AI 2nd, Cloud & Digital Entertainment & Cybersecurity plus Social Media.  Future Cars has recently retreated along with Genomics.
• Global benchmark helped with 26% Asia weight (Japan, China, South Korea) vs Nasdaq 100% US.
• ITEK broader than GICS classification - includes EVs, Gaming/Streaming, Social Media (excluded by Tech Indices). 
• Best performing monthly Holdings - all Subthemes represented.

Source of all data: Gins Global / Bloomberg as of 31/10/2023. 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

• Tech positive rerating likely - US inflation falling; Fed likely to pause again soon.
• Low P/Es - attractive valuations. Quality Megatrend holdings amongst lowest P/Es in years.
• Gaming, Cloud, Social Media, Cybersecurity converging – hugely benefit from WFH trends.
• AI usage across Megatrend space - boosting Big Tech valuation. Over $2tn spending in AI within decade 
• Online Gaming dominated by Mobile - boosting Digital Entertainment/Videos (see chart). 
• Social Media enjoys boost via gaming & video streaming (expected to double in 3yrs).
• Genomics mainstream now - (Gene Editing & CRISPR), targeting cancer & key diseases.
• US Chips Act & $1tn Infrastructure Bill boosts rollout of EV Charging Stations & onshoring IT trend.
• Fast adoption of OpenAI - ChatGPT & BARD AI – boosts Cloud usage.
• EVs 10% of Global New Cars Sales in 2022. US expected to hit 10% within 2yrs.  
• US laws ban traditional cars by 2035 & new $7,500 subsidies.

Subtheme Returns - October

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

Largest Contributors - October

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

Tech Megatrends ETF Performance
 As of 31.10.2023

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 31/10/2023

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.