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Monthly Innovative Technology Market Report | May

  • Many innovative technologies have been leading beneficiaries of the Covid-19 global lockdown (Robotics, Genomics, Cloud).
  • Working remotely has also created increased demand and traffic across Social Media and Cybersecurity.
  • Medical technology also increasingly popular. 

 

ITEK Monthly Performance

 April  YTD*  12 Month **
14.14% -2.19% 5.20%

 

Past performance is no guarantee of future performance.
Source: Bloomberg/HANetf
*YTD figures based on 01.01.20 - 30.04.20
**12 Month figures based on 01.05.19 -30.04.20

 

Performance Review

HAN – GINS Innovative Technology UCITS ETF (ITEK) hit an all-time high during the middle of the quarter, reaching $9.80 in February.

April saw an impressive recovery of just over 14%. By the end of April losses for the year 2020 were down to just over 2%. The current COVID-19 lockdown and move to remote working has boosted demand for various Technology subthemes included in ITEK. Automated & remote services were the major beneficiaries.

Over the past 12 months, ITEK has gained over 5%, due its equally weighted construction across 8 subthemes. Performance across all 6 subthemes currently populated - has been remarkably steady. The 1st quarter table below shows the performance comparison (all single digit losses).

Sub-Theme Performance – 1st Quarter 2020

Contribution Total Return (%)
Cyber Security -0.35
Genomics -1.19
Cloud Computing -1.86
Social Media -3.36
Future Cars -3.64
Robotics & Automation -3.91
Past performance is no guarantee of future performance 
S
ource: Solactive Fact Set. Data as of 31/03/20 (Q1 of 2020)

 

HAN–GINS Innovative Technology UCITS ETF Performance -YTD (01.01.20 -30.04.20)

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. Source: Bloomberg. Data as of 30/04/20 (Bloomberg daily NAV data published on Bloomberg)

 

Innovative Technology News

The Coronavirus pandemic is helping to boost adoption rates across a variety of innovative technologies.

Big Tech has benefited from growth of their remote Cloud platforms – particularly leaders in Infrastructure as a Service (IaaS) – Amazon, Microsoft and Google. We have also witnessed spiking demand for data and privacy protection – boosting Cybersecurity stocks. This demand comes from both the public sector (schools, governments, hospitals) and large/small players in the private sector. The likes of Adobe, salesforce, SAP and Oracle are big beneficiaries of this rollout of Cloud’s plumbing. Cloud spending is benefiting at the expense of other IT areas. The flexibility and lower-cost subscription model offered by the Cloud – makes it increasingly an easy solution for many corporate IT departments.

In line with the race for a medical vaccine and the demand for healthcare solutions – genomics and the field of gene editing has received a large amount of attention. With COVID-49’s genetic code now being known – genomics companies are at the forefront of vaccine research and possible human trials being conducted globally.

Remote working is ensuring key tech trends are being adopted even sooner than analysts expected. From telemedicine and medical wearables to cloud computing and AI/Robotics. The world is changing fast – businesses, hospitals and consumers are unlikely to go back to pre-COVID19 habits.

The increasing shift to the cloud – has also led to a sizable increase in demand for cybersecurity companies. A number of our holdings benefited from the growth in VPN and other forms of security software licenses being bought by large and small enterprises.

In China and Europe their lockdowns are also spurring local players (Alibaba, Baidu and Tencent) to enjoy record online traffic. Baidu and Weibo have both seen a substantial increase in traffic due to the lockdown in China. Other players including Facebook and the Meet Group have enjoyed record usage – powering stock market gains.

With behaviors likely to change amongst commuters – the future car segment powered by Tesla has enjoyed a significant rerating in April. Analysts predict EV vehicle producers are better positioned to weather the current economic decline. Tesla shares have recovered significantly since its March lows – and are approaching recent highs, despite Elon Musk’s protestations.

Source: https://www.cnbc.com/2020/04/02/tesla-tsla-1q-2020-production-and-delivery-numbers.html

Year to date performance has been largely powered by the Healthcare Innovation, Cloud and Cybersecurity subthemes as seen in this table

For illustrative purposes only
Source Bloomberg/HAN data 24 April 2020, based on Sharpe Ratio

 

Constituent News

The benchmark is increasingly global – with US constituents now representing less than a 60% total weighting. Asia’s weighting is now at 25% followed by Europe at 14% approximately. (Source HANetf).

The weakest performing subtheme so far in 2020 has been Future Cars and Robotics. By contrast our Cloud Technology, Genomics (Healthcare) and Cybersecurity holdings have performed best.

Tesla has recovered well from its earlier lows around $400, after exceeding delivery expectations. It was trading at $781 by the end of April. NVIDIA in the robotics and automation areas has also benefited from the recent Tesla rerating, after posting positive earnings. (www.bloomberg.com)

For 2020 to date Biontech has been the best performer, benefiting from its involvement in a possible COVID-19 vaccine. Cybersecurity players ZScaler, Norton and Crowdstrike have all posted significant gains too – based on the growth of VPN and related security licenses bought by corporations with large numbers of staff working remotely from home. Cloud players from IBM and Amazon to Microsoft and Equinox have experienced their highest levels of online traffic. Microsoft reported onboarding as many cloud customers in just 2 months versus all of the past 2 years.

Top 10 Performance Contributions- Q1 2020

For the first quarter the Top 10 Performance Contributions were as follows: These holdings were well represented across all 6 subthemes that currently qualify.

Company Sub Theme % Weight Total Return (%)

Contribution to Return (%) 

BIONTECH SE Genomics 0.45 74.43 0.86
TESLA INC Future Cars 2.35 25.26 0.49
ZSCALER INC Cyber Security 0.91 30.88 0.38
MEET GROUP INC/THE Social Media 1.83 17.17 0.24
YUAN LONGPING HIGH-TECH AG-A Genomics 1.41 21.07 0.23
CROWDSTRIKE HOLDINGS INC - A Cyber Security 0.25 21.73 0.23
BEIJING SINNET TECHNOLOGY-A Cyber Security 1.30 17.19 0.18
NORTONLIFELOCK INC Cyber Security 0.73 15.19 0.13
IOVANCE BIOTHERAPEUTICS INC Genomics 1.17 8.15 0.12
FERRARI NV Future Cars 0.29 10.77 0.12

Past performance is no guarantee of future performance Source: Solactive Fact Set. Data as of 31/03/20 (Q1 of 2020)

 

Top 10 Constituents Weight
Regeneron Pharmaceuticals Inc 6.10%
Biogen Inc 5.20%
Edwards Lifesciences Corp 4.72%
Dexcom Inc 4.26%
Medtronic PLC 4.12%
Intuitive Surgical Inc 4.06%
Boston Scientific Corp 3.77%
Illumina Inc 3.70%
Zimmer Biomet Holdings Inc 3.49%
Agilent Technologies Inc

3.43%

 

Region Breakdown Weight
North America 59.84%
Asia 25.25%
Europe 13.78%
MENA 1.13%

 

Sub-Theme Breakdown Weight
Cloud 17.00%
Cybersecurity 16.60%
Future Cars 16.03%
Genomics 17.70%
Robotics & Automation 16.65%
Social Media 16.01%
Source: Bloomberg / HANetf. Data as of 30/04/20

 

Fund Details

HAN-GINS Innovative Technology UCITS ETF (ITEK) is a UCITS compliant Exchange Traded Fund domiciled in Ireland. ITEK tracks the Solactive Innovative Technologies Index (Net Total Return), an index of leading companies that are driving innovation in sectors including Robotics & Automation, Cloud Computing & Big Data, Cyber Security, Future Cars, Genomics, Social Media, Blockchain and Augmented & Virtual Reality.

The Solactive Index is managed according to a published, rules-based methodology. It is designed to measure the performance of an investable universe of publicly-traded companies that are involved in innovative and disruptive technological trends across a broad range of industries mentioned. To be included, companies must derive a majority of revenue from one of these themes.

Please remember that the value of your investment may go down as well as up and past performance is no indication of future performance.

EXCHANGE BB CODE RIC ISIN CURRENCY INCOME
London Stock Exchange ITEK LN ITEK.L IE00BDDRF700 USD Acc
London Stock Exchange ITEP LN ITEP.L IE00BDDRF700 GBP Acc
Borsa Italiana ITEK IM ITEK.MI IE00BDDRF700 EUR Acc
XETRA T3KE GY T3KE.DE DE000A2N5XE0 EUR Acc

 

Click here to download: Monthly Innovative Technology Market Report

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