- Digital
Infrastructure and Connectivity have become increasingly infused into
commercial and consumer experiences worldwide from music, movies and video
games to education to increased acceptance of remote work and virtual meetings; these themes can be seen in our Technology ETF DIGI
- The 2020 Coronavirus pandemic has greatly accelerated the global
economy’s embrace of technology, especially education, remote work,
communication and data processing.
- 5G represents an upgrade cycle in this sector; it is at currently the
fifth such opportunity for infrastructure and connectivity focused companies.
- As digital infrastructure improves, the increased capacity spurs both
increased use and innovative development of data intensive platforms that push
the limits of the newly improved network.
Performance Review
- Digital Connectivity and Digital Processing names led the index our Technology ETF follows this
month
- Data Networks and Digital Transmission names dragged on performance
- Digital Services & IP names took the biggest hits this month
- Strengthening TWD and JPY added to returns while EUR weakness dragged
slightly
Tematica BITA Digital Infrastructure and Connectivity Index
Performance
October
|
12 Month*
|
-1.77%
|
33.02%
|
Past
performance is no guarantee of future performance.
Source: Tematica Research, BITA
*12
Month figures based on 31.10.2019 – 31.10.2020
Interestingly, names in
the Digital Processing segment impacted October returns, both positively and
negatively, with the three largest detractors to returns being Nvidia Corp
(NVDA: -7.36%), Advanced Micro Devices (ADM: -8.17%) and Intel Corp (INTC:
-14.48%). Offsetting these impacts were other Digital Processing names
including Renesas Electronics Corp (JP:6723: 13.45%), Mediatek Inc (TT:2454:
12.97%) and NXP Semiconductor NV (NXPI: 8.26%).
From the Digital
Services segment, Fastly was the worst performing name in the index this month,
losing approximately 25% the day after announcing it would not meet third
quarter guidance. The company continued to drift lower over the remainder of
the month, with the company stating that reduced business from Tik Tok owner
ByteDance presented a headwind to achieving expectations. Shopify was another
name that traded off during October, albeit more towards the end of the month
when, despite having a strong quarter, investors saw a profit taking
opportunity on statements from management that the explosive growth experienced
in the past few quarters might not materialize in future quarters as the
initial rush to digitise storefronts subsides.
Past performance is no guarantee of future performance.
Source of all data Tematica Research. All data as of 31.10.20
Digital Infrastructure and Connectivity UCITS ETF Performance
Total Return NAV to Date (up to 31/10/2020)
|
1M
|
3M
|
6M
|
YTD
|
12M
|
Since Inception
|
Digital Infrastructure and Connectivity UCITS ETF
|
-7.09%
|
-
|
-
|
-7.09%
|
-
|
-7.09%
|
Tematica BITA Digital Infrastructure Index
|
-6.90%
|
-1.88%
|
22.45%
|
21.01%
|
33.02%
|
-6.90%
|
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 /
HANetf. Data as of 31/10/2020
Industry News
Qualcomm (QCOM) Long-time communication
chip maker looks to move upstream in digital infrastructure push. Qualcomm Inc.
announced it will produce chips for 5G telecommunications networking gear,
marking the first entry by a major American technology company into a market
dominated by European and Chinese firms.[1]
Canalys According
to Canalys data, cloud infrastructure services spending grew 33% year-on-year
in the September quarter to $36.5 billion, a $2 billion QoQ increase.[2] Per Canalys, “The return of stricter lockdown measures in certain regions over
the coming months means cloud will remain vital for sustaining business
operations, remote working and learning, as well as customer engagement.”[3]
Edge Computing World The industry group held
its 2020 global conference (virtually, of course) on October 12th –
15th with developer and executive channels covering a wide range of
topics including Auto, Retail, Industrial, Telco, Application Management and
Artificial Intelligence.[4]
Constituent News
Ranked Segments
|
Ranked Weighted Segment Returns
|
Digital Connectivity
|
0.44%
|
Digital Processing
|
0.26%
|
Data Centers
|
-0.06%
|
Data Networks
|
-0.30%
|
Digital Transmission
|
-0.64%
|
Digital Services & IP
|
-1.50%
|
Past performance is no guarantee of future performance.
Source of all data Tematica Research. All data as of 31.10.20
Digital Infrastructure and
Connectivity UCITS ETF Performance Attribution Tables
Ticker
|
Top 10
|
Period Return
|
Contribution to Return
|
Segment
|
6723:JP
|
Renesas Electronics Corporation
|
13.42%
|
-33.58%
|
Digital Processing
|
2454:TT
|
Mediatek Inc.
|
13.02
|
-32.42%
|
Digital Processing
|
NXPI
|
NXP Semiconductors Nv
|
8.26%
|
-19.13%
|
Digital Processing
|
CALX
|
Calix Inc.
|
31.66%
|
-16.44%
|
Data Networks
|
IPHI
|
Inphi Corp.
|
24.51%
|
-14.01%
|
Digital Connectivity
|
DY
|
Dycom Industries Inc.
|
22.95%
|
-12.05%
|
Data Networks
|
PWR
|
Quanta Inc.
|
18.10%
|
-10.23%
|
Data Networks
|
XLNX
|
Xilinx Inc.
|
13.86%
|
-9.71%
|
Digital Connectivity
|
MXL
|
Maxlinear Inc.
|
13.77%
|
-8.69%
|
Digital Connectivity
|
QCOM
|
Qualcomm Inc.
|
4.83%
|
-8.69%
|
Digital Services & IP
|
Ticker
|
Bottom 10
|
Period Return
|
Contribution to Return
|
Segment
|
CTXS
|
Citrix Systems Inc.
|
-17.75%
|
7.33%
|
Digital Transmission
|
QIWI
|
Qiwi Plc
|
-15.91%
|
7.35%
|
Data Networks
|
INSG
|
Inseego Corp.
|
-15.70%
|
7.56%
|
Digital Services & IP
|
UNIT
|
Uniti Group Inc.
|
-16.28%
|
7.61%
|
Data Networks
|
6702:JP
|
Fujitsu Ltd
|
-14.09%
|
8.25%
|
Digital Services & IP
|
AAOI
|
Applied Optoelectronics Inc.
|
-21.96%
|
8.71%
|
Digital Transmission
|
SHOP
|
Shopify Inc.
|
-9.53%
|
17.02%
|
Digital Services & IP
|
NVDA
|
Nvidia Corporation
|
-7.36%
|
21.97%
|
Digital Processing
|
AMD
|
Advanced Micro Devices Inc.
|
-8.17%
|
24.67%
|
Digital Processing
|
INTC
|
Intel Corp
|
-14.48%
|
24.90%
|
Digital Processing
|
Attribution analysis is
calculated by comparing the weighted period price return of a security to the
net of taxes total return index results and as such represents an approximation
of the impact a name or group of names has had on the overall index returns for
the period. 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: Tematica Research. Data as of 31/10/2020
Outlook
The
increasing global dependence on the internet coupled with the virtuous circle
of increased storage and processing capacity leading to more use and innovative
application development is an ongoing process. With upgrade cycles like the one
we are seeing with 5G (and will again with 6G in the next decade) present both
a short- and long-term opportunity for those companies that provide goods and
services to the various segments in the digital infrastructure and connectivity
space.
Fund Details
DigitalInfrastructure and Connectivity UCITS ETF, is a UCITS compliant digital
infrastructure ETF domiciled in Ireland.
Our Technology ETF captures the
companies that enable the digital applications of today and those that will
redefine how people work, live and play tomorrow. It provides exposure to the explosive growth
of the digital infrastructure virtuous cycle of expanding data, applications,
and bandwidth that drives exponential network growth and development of new
technologies.
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 |
TER |
London Stock Exchange
|
DIGI LN
|
HADIGI.L
|
IE00BL643144
|
USD
|
0.69%
|
London Stock Exchange
|
PIGI LN
|
PIGI.L
|
IE00BL643144
|
GBP
|
0.69%
|
Borsa Italiana
|
DIGI IM
|
DIGIT.MI
|
IE00BL643144
|
EUR
|
0.69%
|
XETRA
|
DIGI GY
|
DIGI.DE
|
IE00BL643144
|
EUR
|
0.69%
|
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