- COVID-19 continues to boost adoption rates of innovative technologies
(social media, robotics, genomics, cloud, and cybersecurity).
- Mobile App store spending to double within 4 years – China is the
largest market and growing faster than the US.
- Internet of Things is at the centre of impressive Tech Megatrend
spending growth.
- Gene therapies are becoming more mainstream in the search for vaccines
and personalised medicine.
Performance review
HAN-GINS Tech Megatrend Equal Weight UCITS ETF (ITEK) has
continued its impressive performance. In July it returned 9.97%, following June
gains of 6.70%. ITEK shows an impressive year to date return of 22.98%.
Over the past 12 months, ITEK has gained 33.05%. For 2020, performance
across the equally weighted 6 subthemes has been dominated by Cybersecurity (up
36.7%), Genomics (31.6%), Social Media (30.9%), Future Cars (20.3%), Cloud
Computing (16.5%) and Robotics-AI (5.0%).
For July, the top performing sectors were: Social Media which
gained 29.3% followed by Future Cars at 11.7%. These gains were powered by
Asian, US and Russian Social Media players including Twitter, Pinterest,
Mail.ru Sohu and Sogou. Future Cars were led by Tesla and Advanced Micro
Devices plus Nvidia. See tables on page 5 for full breakdown.
(Source: FactSet/Solactive and
Bloomberg Data as of 31/07/20)
July |
YTD* |
12 Month** |
9.97% |
22.98% |
33.05% |
Past performance is no guarantee of future performance.
Source:
Bloomberg/HANetf
*YTD figures based
on 01.01.20 - 31.07.20
**12 Month figures
based on 01.08.19 -31.07.20
Work From Home behaviours have powered faster adoption rates across
the Tech Megatrends space. Online spending has continued to surge, with Amazon
and Apple both hitting new highs, gaining 14.7% and 16.5% respectively. App
Store spending is at record highs and predicted to continue growing by 20%
annually until 2024[1].
Social Media engagement has never been higher, allowing App Store
spending and advertising online via Twitter. Social media usage has spiked due
to the lockdown amongst adults, with estimates
that adult social media users will average 82 minutes per day on such sites in
2020, a gain of 7 minutes from 2019[2]. We do not expect Work From Home behaviours to
change as COVID lingers through the rest of 2020 and into 2021.
The lockdown continues to see a spike in online
video streaming – both for work and pleasure (Google Meets, Microsoft Teams).
We see a big shift towards online entertainment – away from traditional movies
and sports.
Tesla’s rerating by leading bank analysts in June
and July helped propel the entire sector up, but ultimately social media was
the big winner in July as Asian, European and US platforms enjoyed record
usage. Our Tech ETF is now sitting at an all-time high NAV exceeding $11 per share as
of 31st July. (Source HANetf, Bloomberg)
HAN-GINS
Tech Megatrend Equal Weight ETF (ITEK) – 1 Year performance (01.08.19 – 31.07.20).

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 31/07/20
Innovative Technology News
The
Internet of
Things is at the centre of the impressive Tech Megatrend spending growth being
experienced. While COVID is fast tracking engagement, such behaviours are
unlikely to change. COVID has propelled the future into the present – speeding
up the Tech Revolution that was already well underway.
Global spending in Apps will surpass $100 billion for the
first time in 2020, continuing to grow at approximately 20% year-over-year
through 2024. This means a doubling in App spending is predicted by 2024.[3] Please see charts on the next page.
Mobile
gaming, which is included in our new Digital Entertainment subtheme, will
likely dominate App spending through 2024. Chinese App store spending is
already larger than US and is projected to grow faster too (CAGR 17% vs 14%
respectively).[4]
Worldwide consumer spending in mobile apps is projected
to reach $171 billion by 2024, which is more than double the $85 billion from
2019.[5]
We expect cybersecurity spending to continue to grow on
the backs of remote working gaining more adoptees. Silicon Valley leaders such as Microsoft,
Apple and Google are allowing their employees to continue working from home
well into 2021.
App Store Revenue by Country
Projected
consumer spending

For illustrative purposes only.
Source: Sensor Tower Research - https://techcrunch.com/2020/04/01/mobile-app-spending-to-double-by-2024-despite-economic-impacts-of-covid-19/
Asia has also enjoyed a big rally in tech stocks, led by Chinese online giants
Alibaba and Tencent which hit record highs in July[6], with some trading
on more affordable PE ratios than their US counterparts. While Amazon has a
forward PE ratio currently over 80, Alibaba sits on a PE ratio of 28[7].
The Trump administrations current crackdown on TikTok and WeChat (Tencent) will
likely limit such price gains going forward for Chinese social media players.
Electric
vehicle producers are seeing greater adoption rates too. Large players such as
GM, Volvo and Ford are rolling out record numbers of hybrid and EV type models.
Europe’s adoption of green technology and ESG standard for investing is pushing
the long-term obsolescence of the internal combustion engine. The EU’s
stringent targets to reduce carbon emissions is helping lead to the adoption.
France’s new $8.8bn stimulus plan to reboot its auto sector with a $7,000 EV
subsidy will give it a leg up, while Germany’s new coronavirus
stimulus bill also boosts EV subsidies,
almost doubling the discount for non-luxury vehicles to roughly
$10,000. Germany has also now mandated installing EV chargers at all gas stations[8].

For illustrative purposes only.
Source: BNEF. Note: Electric share of
annual sales includes battery electric and plug-in hybrid
Constituent News
The
largest number of top holdings are currently represented by Genomics, Cyber
Security and Cloud Computing,
due to the strong gains across these subthemes in July.
US exposure has dropped below 60% particularly due to foreign
Social Media companies and Biotech players such as Biontech. Genomics and Cyber
Security are currently the two largest themes approaching 20%.
The semi-annual equal rebalancing in September will mean their
weightings subside back to around 15%-16%.
On the next page is a table showing which holdings contributed
most to performance during July. A large proportion of Social Media, Genomics, Future
Cars, and Cyber Security companies are represented. Most striking has been the
stock market gains across Asia and Russian social media players Sohu (up
149.40% in July), Sogua (up 106.22%), Yandex (15.03%) and Mail.ru
(17.56%).
Amongst US holdings – Pinterest gained 54.67%, Tesla 32.50%,
Advanced Micro Devices 47.18%, Twitter 22.19%, Crowdstrike 12.87% and Zscaler
18.58% - amongst the most impressive returns this past month.
Cyber
Security players Zscaler and CrowdStrike are now both amongst our Top 10 holdings.
Other Future Car players benefitted included Hyundai up 30.74% and
Nvidia up 11.76%.
Ultimately new highs being enjoyed by Big Tech heavyweight players
Amazon, Apple, Alibaba and Amazon helped propel the Tech ETF to impressive new
highs.
Robotics –Automation players MEDIATEK were up 23.97% in July and
Intuitive Surgical up 20.29%, both showing impressive gains – partly as a
result of the lingering effects of COVID-19.
With current holdings now at almost 100 holdings – ITEK offers an
increasingly broad diversified play across the entire Fourth Industrial
Revolution sphere.
ITEK’s Top 20
Performance Contributors – July 2020
Constituent
|
Sub-theme
|
Total
Return (%)
|
Contribution
(%)
|
SOHU.COM LTD-ADR
|
Social Media
|
149.40
|
1.68
|
SOGOU INC-ADR
|
Social Media
|
106.22
|
1.26
|
PINTEREST INC- CLASS A
|
Social Media
|
54.67
|
0.69
|
TESLA INC
|
Future Cars
|
32.50
|
0.53
|
ADVANCED MICRO DEVICES
|
Future Cars
|
47.18
|
0.51
|
BIONTECH SE-ADR
|
Genomics
|
23.44
|
0.43
|
ZSCALER INC
|
CyberSecurity
|
18.58
|
0.38
|
MEDIATEK INC
|
Robotics & Automation
|
23.97
|
0.32
|
MAIL.RU GROUP-GDR REGS
|
Social Media
|
17.56
|
0.25
|
TWITTER INC
|
Social Media
|
22.19
|
0.25
|
HYUNDAI MOTOR CO
|
Future Cars
|
30.74
|
0.25
|
YANDEX NV-A
|
Social Media
|
15.03
|
0.22
|
CROWDSTRIKE HOLDINGS INC - A
|
Cyber Security
|
12.87
|
0.21
|
AMAZON.COM INC
|
Cloud Computing
|
14.71
|
0.21
|
INTUITIVE SURGICAL INC
|
Robotics & Automation
|
20.29
|
0.21
|
APPLE INC
|
Cloud Computing
|
16.51
|
0.19
|
IPSEN
|
Genomics
|
13.77
|
0.18
|
QUALCOMM INC
|
Robotics & Automation
|
15.79
|
0.18
|
SINA CORP
|
Social Media
|
12.36
|
0.17
|
ALIBABA GROUP HOLDING-SP ADR
|
Cloud Computing
|
16.37
|
0.17
|
NVIDIA CORP
|
Future Cars
|
11.76
|
0.16
|
SKYWORKS SOLUTIONS INC
|
Future Cars
|
13.86
|
0.16
|
CHECK POINT SOFTWARE TECH
|
Cyber Security
|
16.68
|
0.16
|
OKTA INC
|
Cyber Security
|
10.36
|
0.15
|
FACEBOOK INC-CLASS A
|
Social Media
|
11.71
|
0.15
|
SAP SE
|
Cloud Computing
|
13.36
|
0.15
|
EQUINIX INC
|
Cloud Computing
|
11.84
|
0.14
|
PALO ALTO NETWORKS INC
|
Cyber Security
|
11.43
|
0.13
|
SAMSUNG SDI CO LTD
|
Future Cars
|
10.42
|
0.12
|
HEXAGON AB-B SHS
|
Robotics & Automation
|
11.45
|
0.12
|
Past performance is
no guarantee of future performance
Source of all data: Solactive / FactSet. Data as of 31/07/20
Sub-Theme
Performance - July 2020
Contribution |
Total Return (%) |
Weight (%) |
Performance of Category (%) |
Social Media |
4.77 |
15.49 |
29.34 |
Future Cars |
1.93 |
15.21 |
11.68 |
Cyber Security |
1.18 |
18.50 |
7.04 |
Cloud Computing |
1.10 |
15.78 |
6.87 |
Robotics & Automation |
0.65 |
15.60 |
4.12 |
Genomics |
0.30 |
19.44 |
1.65 |
Past performance is
no guarantee of future performance
Source of all data: Solactive / FactSet. Data as of 31/07/20
Top 10 Constituents |
Weight |
Sohu.com Ltd |
2.65% |
Sogou Inc |
2.23% |
Zscaler Inc |
2.20% |
BioNTech SE |
2.13% |
Pinterest Inc |
1.94% |
Tesla Inc |
1.89% |
Media Tek Inc |
1.77% |
Crowdstrike Holdings Inc |
1.67% |
Yandex NV |
1.56% |
Okta Inc |
1.52% |
Regional Breakdown |
Weight |
North America |
57.80% |
Asia |
26.35% |
Europe |
14.78% |
MENA |
1.06% |
Sub-Theme Breakdown |
Weight |
Genomics |
19.44% |
Cyber Security |
18.50% |
Cloud Computing |
15.78% |
Robotics & Automations |
15.06% |
Social Media |
15.49% |
Future Cars |
15.21% |
Source: Bloomberg/ HANetf. Data as of 31/07/2020
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