- COVID-19 fast track adoption of technology continues to boost stock
valuations across our 8 subthemes.
- Future Cars rerating of Tesla, Hyandai and others led this subtheme to
outperform.
- Cloud computing, Social Media, Cybersecurity and Robotics-AI also
performed well.
- With US firms now below 60% exposure, the technology ETF benefited from Asian, Russian
and other non US holdings.
- Equal weighting helped ensure diversified performance.
Performance Review
HAN-GINS Tech Megatrend Equal Weight UCITS ETF (ITEK) has continued
to benefit from the tailwinds provided by faster technology adoption rates
during the COVID-19 pandemic. In August
it returned 5.82%, and shows an impressive year to date return of 30.15%.
Over the past 12 months, our technology ETF has gained 47.165. For 2020, performance
across the equally weighted 7 subthemes currently populated has been dominated
by Cybersecurity (up 42.0%), Genomics (30.7%), Social Media (38.0%), Future
Cars (34.0%), Cloud Computing (25.6%) and Robotics-AI (17.3%). For August, the standout performer was Future
Cars, up 17.9%, led by Tesla which gained 74.2%. Cloud Computing followed with a 7.9% gain and
Social Media was up 5.3% for the month. These gains were powered by a broad
rerating across Cloud, Robotics and Social Media stocks.
The leading performers in August benefited from Work From Home
behaviours that have become increasingly permanent. After Tesla, gains were led by Salesforce
(39.9%), Hyandai cars (40.6%) and NVIDIA (26.0%) See detailed Table in report.
With online spending surging, Amazon has announced a new hiring
spree of an additional 33,000 workers.
Microsoft, Amazon and Apple all hit new highs at the end of August, with
Apple the largest US company reaching a $2 trillion valuation. This has been powered by App Store. Following Asian social media stocks posting
record share price gains in July, it was the turn of Russian leaders Yandex and
Mail.ru to post impressive gains in August.
ITEK enjoyed new highs through much of August and on 1st
September 1st its NAV reached $11.92 per share[1].
For the year to date, Tesla remains the top performing holding –
up 495.6%, followed by cybersecurity firms ZScaler (208.3%) and Crowdstrike
(174.9*) and robotics firm NVIUDIA (127.6%)[2].
We believe remote behaviours are here to stay amongst increasingly
tech savvy consumers and workers. While
profit taking is likely in the short term, over the medium term we believe ITEK
contains the majority of leaders across the Fourth Industrial Revolution. Unlike the top-heavy Nasdaq and MSCI Tech
indices, our equally weighted ITEK approach ensures performance is less
volatile and broader based.
ITEK Monthly Performance
August |
YTD* |
12 Month** |
5.28% |
30.15% |
47.16% |
Past performance is no guarantee of future performance.
Source:
Bloomberg/HANetf
*YTD figures based
on 01.01.20 - 31.08.20
**12 Month figures
based on 01.09.19 -31.08.20
Solactive Innovation Technologies Index (NTR) and ITEK ETF Performance
Total Return NAV to Date (up to 31/08/2020)
|
1 M |
3 M |
6 M |
YTD |
12 M |
Since Inception |
HAN-GINS Tech Megatrends Equal Weight UCITS ETF |
5.82% |
24.17% |
35.77% |
30.15% |
47.16% |
50.90% |
Solative Innovative Technologies Index (NTR) |
5.08% |
24.44% |
36.07% |
30.42% |
48.08% |
52.41% |
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 31/08/20
Innovative Technology News
The
US-China trade war has spilled over to Social Media sites WeChat and
TikTok. The chart below shows their
dominance in China and growing usage.
The global lockdown has boosted usage and propelled most social media
stocks higher.
With
the Internet of Things powering many of the current Tech megatrends, Cloud
computing is the backbone, ensuring companies and consumers remain
connected. Gartner now predicts the
worldwide public cloud service market will grow from $182.4bn in 2018 to
$331.2bn in 2022, attaining a compound annual growth rate (CAGR) of 12.6%.[3] This growth may be understated, given how long
COVID-19 outbreaks continue making new behaviours increasingly permanent.
The global Video
Streaming Market is projected to grow to $184.3bn by the end 2027[4]. This
translates into an impressive annualised growth (CAGR) of 20.4% between 2020
to 2027. Asia Pacific is expected to see the fastest growth due to increasing
tech advancements (AI and Blockchain). Global
growing smartphone and Cloud adoption rates will help online video streaming
from even remote locations and across the developing world.

ITEK Rebalance News
On September 9th 2020, ITEK was rebalanced as part of the regular twice-yearly
process, with the number of holdings rising from 86 to 104. This includes 36
new additions and 18 deletions. All 8 subthemes are represented with
holdings and are equally weighted. This
ensures each holding has an approximate 1% weighting.
The increase in
holdings provides further diversification. These changes are primarily
attributable as follows:
Digital Entertainment has
been added as a new subtheme. The subtheme includes our existing Virtual
Reality subtheme, but is now far broader. Given the growth of online
streaming devices for movies, music and gaming, we felt it was important to
capture these growing trends. Amongst the 15 new holdings, these include
Netflix, Spotify (music), plus Nintendo and Activision (leading gaming
companies). This subtheme includes the following expanded categories:
- Virtual Reality Design and Engineering
Software
- Home and Office Virtual Reality
Software
- Virtual Reality Equipment
- Media Download and Streaming Digital
Content Sites
- Media and Entertainment Industry
Software
- Electronic Gaming Equipment
- Electronic Gaming/Entertainment
Electronics Makers
- General Gaming Industries
- General Gaming Products and Services
- Online Gaming Systems
- Other Games Software
- Online Game Websites and Software
- Handheld and Smart Phone Games Software
The Genomics (Gene Therapy) subtheme definition has
also been expanded to fully capture all the new activity occurring across the
gene therapeutic and editing arenas. Consequently, eight new firms have been included, including Illumina and Agilent; both are global leaders
(US based) in their respective genetic fields of genetic
variation analysis and gene quality control/data
analysis. The definition now includes the following broader categories:
- Hematological Oncology
Biopharmaceuticals
- Other Oncology Biopharmaceuticals
- Biotechnology and Genomics
(GMO/Hybrids) Products
- Diversified Bioanalytical Instruments
- Analytical and Bioanalytical Services
- Bioanalytical Consumables
- Genetic Molecular Diagnostic Test Kits
Cloud Technology - this
mirrors the Top 15 holdings held in our HAN-GINS Cloud Tech ETF. ITEK
Cloud holdings were updated in line with our Cloud ETF holdings which were
rebalanced in July. Recent additions included Twilio and Zoom Video. This
subtheme now more accurately captures the full scope of Cloud activity,
including cloud security companies, plus cloud communications and conferencing
firms.
Each of our 8
subthemes holds a maximum of 15 holdings, with each of these holdings equally
weighted. In turn each subtheme is equally weighted in the technology ETF. The
8 subthemes represented are:
- Social Media
- Cloud Technology
- Genomics
- Robotics and Automation
- Digital Entertainment
- Cybersecurity
- Future Cars
- Blockchain
Constituent News
Prior to the upcoming September rebalance, the largest subtheme
weightings were represented by Genomics, Cybersecurity, Robotics-Automation and
Social Media – led by strong gains across these subthemes in August.[5]
US exposure has dropped below 60% particularly due to foreign
Social Media companies, Future Car and Biotech players – including Hyandai,
Biontech and Mail.ru.[6]
On the next page, the table shows which holdings contributed most
to August performance. It is clear that
Future Cars drove performance off the back of tesla, followed by Cloud
Computing, Social Media, Cybersecurity and Robotics.
It is gratifying to see our broad-based approach of having 8
subthemes is succeeding, with many of the subthemes being represented amongst
the top performing holdings in August.
Due to significant Cybersecurity gains and analyst reratings, both
Zscaler and CrowdStrike are now amongst our Top 10 holdings. Asian and European/Russian social media
players are now also appearing amongst our top holdings (Sohu, Sogou, Mail.ru
and Yandex). Not surprisingly, Tesla, at
3.1%, was our largest weighting due to its recent impressive gains in August.
With current holdings rising to 104 in early September (at
rebalance), ITEK is well positioned to weather any immediate profit
taking. A number of Tech stocks have
performed beyond expectations and we expect some pullback.
ITEK offers an increasingly broad diversified play across the
entire 4th Industrial Revolution sphere – with broad global
diversification.
ITEK's Top 20 Performing Contributions (%) - August 2020
Name of Holding
|
Index Category
|
% Average Weight
|
Total Return (%)
|
Contribution to Return (%)
|
TESLA INC
|
Future Cars
|
2.25
|
74.15
|
1.41
|
SALESFORCE.COM INC
|
Cloud Computing
|
1.06
|
39.93
|
0.40
|
HYUNDAI MOTOR CO
|
Future Cars
|
1.19
|
39.95
|
0.38
|
NVIDIA CORP
|
Robotics & Automation
|
1.49
|
26.00
|
0.35
|
APPLE INC
|
Cloud Computing
|
1.45
|
21.66
|
0.30
|
YANDEX NV CLASS A
|
Social Media
|
1.62
|
18.58
|
0.29
|
MAIL.RU GROUP-GDR REGS
|
Social Media
|
1.56
|
16.64
|
0.25
|
ADVANCED MICRO DEVICES
|
Robotics & Automation
|
1.54
|
17.29
|
0.25
|
ZSCALER INC
|
Cyber Security
|
2.15
|
10.39
|
0.22
|
FACEBOOK INC
|
Social Media
|
1.49
|
15.58
|
0.22
|
CROWDSTRIKE HOLDINGS INC
|
Cyber Security
|
1.55
|
11.07
|
0.18
|
SAMSUNG SDI CO LTD
|
Future Cars
|
1.33
|
14.18
|
0.17
|
ADOBE INC
|
Cloud Computing
|
1.15
|
15.55
|
0.17
|
YUAN LONGPING HIGH-TECH AG-A
|
Genomics
|
1.16
|
16.38
|
0.16
|
QUALCOMM INC
|
Robotics & Automation
|
1.23
|
12.77
|
0.15
|
ALIBABA GROUP HOLDING-SP ADR
|
Cloud Computing
|
1.08
|
14.35
|
0.15
|
AMAZON.COM INC
|
Cloud Computing
|
1.51
|
9.05
|
0.14
|
GENMAB A/S
|
Genomics
|
1.40
|
10.39
|
0.14
|
TWITTER INC
|
Social Media
|
1.24
|
11.48
|
0.14
|
Pinterest Inc
|
Social Media
|
1.93
|
7.29
|
0.13
|
Sub-Theme Performance (%) - August 2020
Contribution |
Total Return (%) |
% Performance of Category |
Social Media |
0.97 |
5.28 |
Robotics & Automation |
0.67 |
3.70 |
Genomics |
-0.3 |
-1.81 |
Cyber Security |
0.62 |
3.84 |
Cloud Computing |
1.24 |
7.87 |
Future Cars |
2.61 |
17.93 |
Past performance is
no guarantee of future performance
Source of all data: Solactive / FactSet. Data as of 31/08/20
Total 10 Constituents
Tesla |
3.11% |
Zscaler Inc |
2.30% |
Sohu.com |
2.20% |
Sogou Inc |
2.12% |
Pinterest Inc |
1.96% |
Crowdstrike Holdings Inc |
1.78% |
Yandex NV |
1.75% |
Mali.Ru Group |
1.75% |
Advanced Micro Devices |
1.67% |
NVIDIA Corp |
1.65% |
Sub-Theme Breakdown
Cloud |
15.48% |
Cybersecurity |
17.80% |
Future Cars |
15.32% |
Genomics |
19.20% |
Robotics & Automation |
16.13% |
Social Media |
16.08% |
Region Breakdown
North America |
59.16% |
Asia |
25.06% |
Europe |
14.77% |
MENA |
1.01% |
Source: Bloomberg / HANetf. Data as of 31/08/20
Fund Details
HAN-GINS
Tech Megatrend Equal Weight UCITS ETF (ITEK) is a UCITS compliant Megatrend ETF
domiciled in Ireland. Our technology ETF 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
|
SIX
|
ITEK SW
|
ITEK.S
|
IE00BDDRF700
|
CHF
|
Acc
|