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Tech Megatrend Monthly Report | January

  • EV vehicles post strongest growth rates in 8 years.
  • Genomic leaders rerated due to successful vaccine launches.
  • Digital Entertainment, Genomics, Blockchain and Future Cars the biggest contributors to monthly performance.
  • Our technology ETF is increasingly global – with US exposure under 60% now and Asia approaching 30%.

 

Performance Review

HAN-GINS Tech Megatrend Equal Weight UCITS ETF (ITEK) impressed with a 7.63% gain in December - benefiting from fast adoption rates across the Digital Revolution.  Our technology ETF's equal weighting of eight key subthemes ensures it captures many of these gains. ITEK returned 59.92% for 2020.  For December top contributors represented most subthemes including: Future Cars (Tesla up 24.3%), Cybersecurity (Crowdstrike up 38.2%), Digital Entertainment (Bilibili up 36.4%), Blockchain (Riot up 101.0%), Social Media (Baidu up 55.6%) and Genomics (Innovent up 60.7%).

 

ITEK Monthly Performance

 


December


12 Month*


7.63%


59.92%

Past performance is no guarantee of future performance.

Source: Bloomberg/HANetf *12 Month figures based on 01.12.19 - 31.12.20

 

The leading performers in December continued to benefit from COVID-related WFH behaviours.  Blockchain was the best performing subtheme (up 67.7%), followed by Cybersecurity (12.9%), Digital Entertainment (9.4%), Future Cars (6.0%), Genomics (5.3%), Robotics & Automation (3.5%), Social Media (0.9%) and Cloud Computing (0.3%).  Increasing Cybsersecurity is benefiting from the spike in remote/Cloud usage – with bundled protection offerings.  It also benefits from the adoption of hybrid and multi-cloud platforms.

ITEK’s returns for 2020 have been boosted by holdings across all 8 subthemes.  Record online advertising revenues continues to boost Social Media, Digital Entertainment and Cloud holdings.  The pandemic has boosted our Genomics constituents due to reratings.  ITEK contains the majority of leaders across the Digital Revolution and shows far less volatility and lower PE ratios - than the heavily concentrated Nasdaq 100 index.

 

HAN-GINS Tech Megatrend Equal Weight ETF– Performance

Total Return NAV to Date (up to 31/12/20)

 

1M

3M

6M

YTD

12M

Since Inception

HAN-GINS Tech Megatrend Equal Weight UCITS ETF (Acc)

7.63%

24.14%

42.99%

59.92%

59.92%

85.42%

Solactive Innovative Technologies Index (NTR)

7.69%

24.30%

43.36%

60.58%

60.58%

87.66%

 

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 31/12/20

 

Innovative Technology News

The second wave of COVID-19 ensures that remote technology trends are increasingly mainstream and unlikely to be replaced.  Education Technology, EV vehicles, Social Media and Digital Entertainment are fast-growing trends in 2021.  Gaming had its most profitable year ever in 2020 with half the industry’s revenue coming from Asia.[1]

Surveillance and cybersecurity have both become huge issues - ground zero for social media and cloud computing.  We expect more M&A corporate activity in the IT security area as enterprises and individuals seek to protect their data and privacy.

E-commerce is building on the lockdown fuelled growth gaining long-term competitive advantages over more bricks and mortar stores.  As technology and remote working goes global - we expect all of ITEK’s subthemes to benefit from the growth – increasingly fuelled by Asia-Pacific’s fast growing adoption rates.

In the US, the new Biden Administration will support clean-energy and tech far more than past presidencies.  We expect future cars to be a key winner, benefiting from likely subsidies, making EV cars more affordable.    

Global EV car sales finished October 2020 at a near record 342,000 sales (Sept 345,000 was the record) - up 127% on October 2019.  This equates to the highest monthly growth rate in over 8 years with a market share of 4.9% for October 2020, and 3.5% YTD.  Currently, 68% of all global EV car sales in October were 100% battery electric vehicles [BEVs].  Chinese EV sales were 147,000 in October 2020 (up 120% on October 2019). EV market share in China for October was 7.0%, and 5.4% YTD.  Europe EV sales were up 195% YoY reaching 13% share.  Biden's pro-EV sector policies, plus UK bans on new gas/diesel cars from 2030 means EV vehicles will significantly grow their market share approaching 30% by decades end.[2]

 

For illustrative purposes only. Past performance is no guarantee of future performance. Source: https://seekingalpha.com/article/4384125-ev-company-news-for-month-of-october-2020

 

The Digital Revolution outside the US, particularly in Asia, shows the fastest adoption rates and growth predicted across Digital Entertainment, Cloud Tech & Social Media especially. 

US Social Network advertising continues to grow at double digit rates, effectively doubling from 2018-2022 (see chart prediction below.  Recent data shows Digital Advertising representing 50% of all advertising spend in the US – a huge trend as the figure was almost half this level, just 3 years ago.  It’s very likely this trend will be mirrored worldwide shortly.[3]

 

For illustrative purposes only. Past performance is no guarantee of future performance. 

 

Constituent News

 ITEK’s global mix is representative of the Digital Revolution. Our US exposure is currently just 57.39%, with Asia 28.85% and Europe at 12.94%.  Most of our Top 10 and largest holdings are between 1.2% - 2% - prior to rebalance, due to the equal weighting of all 104 holdings.  This is in stark contrast to the Nasdaq 100 and other technology benchmarks. 

Our top performing contributors are listed below for December – by subtheme and holdings.  All subthemes are well represented, but particularly Cybersecurity, Genomics, Future Cars, Blockchain and Future Cars.  All these areas have experienced significant reratings.  Star performers last month include Riot Blockchain (101.0%), Baidu (55.6%), Innovent Biologics (60.7%), Crowdstrike (38.2%), Bilibili (36.4%) and Celltrion Healthcare (38.6%).

Electric Vehicle leaders Tesla and Nio have forced most large car makers to announce multibillion R&D commitments, boosting values of existing EV vehicle players.

For 2020 the biggest contributors to ITEK’s performance gains included Tesla (up 743.4%), Riot (475.9%), Crowdstrike (363.1%), ZScaler (329.5%), Pinterest (253.5%), NIO (169.4%), BioNTech (144.3%), NVIDIA (122.3%) OKTA Cyber (120.4%) and Samsung SDI (cars) 183.1%.

Subtheme Performance – December

Contribution

Total Return (%)

% Average Weight

% Performance of category

Genomics

0.77

14.67

5.25

Digital Entertainment

1.34

14.27

9.39

Robotics & Automation

0.49

14.12

3.47

Blockchain

2.31

3.41

67.74

Future Cars

0.94

15.76

5.96

Cloud Computing

0.04

11.89

0.34

Social Media

0.11

12.27

0.90

Cyber Security

1.65

12.75

12.94

 

ITEK’s Top Performance Contributors (%) – December

Holdings

Index Category

% Average Weight

Total Return (%)

% Contribution to Return

RIOT BLOCKCHAIN INC

Blockchain

2.61

101.07

2.07

BAIDU INC - SPON ADR

Social Media

1.28

55.58

0.60

INNOVENT BIOLOGICS INC

Genomics

0.97

60.70

0.50

CELLTRION HEALTHCARE LTD

Genomics

1.36

38.61

0.45

BILIBILI INC-SPONSORED ADR

Digital Entertainment

1.30

36.37

0.41

CROWDSTRIKE HOLDINGS

Cyber Security

1.19

38.19

0.39

ZSCALER INC

Cyber Security

1.04

28.22

0.26

PROOFPOINT INC

Cyber Security

0.88

31.81

0.25

RINGCENTRAL INC-CLASS A

Cloud Computing

1.00

27.58

0.24

NORTHERN DATA AG

Blockchain

0.80

31.24

0.24

TESLA INC

Future Cars

1.02

24.33

0.23

SAMSUNG SDI CO LTD

Future Cars

1.08

19.93

0.21

PALO ALTO NETWORKS INC

Cyber Security

1.02

20.91

0.20

ROKU INC

Digital Entertainment

1.50

13.10

0.19

TWITTER INC

Social Media

1.17

16.43

0.19

SANGFOR TECHNOLOGIES

Cyber Security

0.83

23.95

0.19

EVOLUTION GAMING GROUP

Digital Entertainment

0.99

18.52

0.18

 

Region Breakdown

Region Breakdown

Weight

North America

57.39%

Asia

28.85%

Europe

12.94%

MENA

0.82%

 Past performance is no guarantee of future performance.

Source of all data: Solactive / FactSet and Bloomberg / HANetf. Data as of 31/12/20

 

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

 

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