- Cloud Computing powering online gaming growth
with record 2.7bn active gamers globally[1]
- In 2020 50m more Americans played games (11m typical year)[2]
- Grandview Research predicts cloud-based gaming
CAGR of 48.2%
- Blockchain’s size is expected to grow from
$3bn in 2020 to $39.7bn by 2025, a CAGR of 67.3%[3]
- Blockchain remains ITEK’s top
performer followed by Social Media and Digital Entertainment.
- Biden’s Stimulus plan is set to boost spending
on Future Cars and Genomics[4],[5]
- Huge cyberattack on US Government, leading to
big public spending on cybersecurity ($200bn in 2024)[6]
Tech
Megatrend ETF (ITEK) Returns
January
|
12 Month*
|
6.42%
|
84.95%
|
Past performance is no guarantee
of future performance.
Source: Bloomberg, Solactive, HANetf
*12
Month figures based on 29.02.20 - 28.02.21. as fund performance.
Performance Review
HAN-GINS Technology ETF (ITEK)
impressed with a 6.4% gain in February as it benefited from fast adoption rates
across the Digital Revolution. ITEK’s
equal weighting across eight key subthemes ensures it captures much of these
gains. ITEK returned 85.0% over the past
one-year period.
For February, Blockchain was the standout subtheme, gaining 55.9%,
followed by Social Media 13.7% and Digital Entertainment 4.8%.
Due to recent monthly gains, Future Cars (15.2%), Digital
Entertainment (14.1%), Genomics (13.5%), Robotics-AI (12.3) and Social Media
(11.9%) remain our largest subtheme weightings ahead of the next index
rebalance in March.
Future Cars continue to benefit from the Biden
Administration’s new green energy approach - with price subsidies likely to be
offered, boosting demand for EV vehicles. Cloud is boosting online gaming and
social media.[7]
Impressive February gains for a large number of Social Media
players (Twitter, Baidu, Pinterest), Digital Entertainment (Evolution Gaming,
Bilibili) and Future Cars (Aptiv, Ford, NXP Semiconductors) also boosted
performance. Robotics standout was Microchip
Tech up 12.4% for the month; while Fortinet up 16.7% was our
Cybersecurity standout. With Asian
companies now representing almost 30% of ITEK, US influence is below 60% and
ITEK is increasingly global.
Past performance is no guarantee of future performance.
Source of all data: Solactive. Data as of 28.02.2021
Megatrend Sub-theme
|
Total Return (%)
|
% Average Weight
|
Performance of category
|
Genomics
|
-0.33
|
13.47
|
-2.45
|
Digital Entertainment
|
0.67
|
14.11
|
4.75
|
Robotics & Automation
|
0.01
|
12.30
|
0.08
|
Blockchain
|
5.04
|
9.02
|
55.88
|
Future Cars
|
0.15
|
15.20
|
0.99
|
Cloud Computing
|
-0.03
|
10.30
|
-0.29
|
Social Media
|
1.62
|
11.87
|
13.65
|
Cyber Security
|
-0.43
|
11.71
|
-3.67
|
Past performance is no guarantee of future performance.
Source of all data: Solactive. Data as of 28.02.2021
HAN-GINS Tech Megatrend Equal Weight UCITS
ETF
Performance
As of 28.02.21
|
1M
|
3M
|
6M
|
YTD
|
12M
|
SI
|
HAN-GINS Tech Megatrend UCITS ETF
|
6.42%
|
19.32%
|
36.22%
|
10.86%
|
84.95%
|
105.56%
|
Solactive Innovative Technologies Index (NTR)
|
6.33%
|
19.34%
|
36.44%
|
10.82%
|
85.65%
|
107.95%
|
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 28/2/2021
Industry News
The Biden Administration’s embrace of Green Energy and
Cybersecurity is helping to positively rerate ITEK’s holdings across Future
Cars, Cloud Security and pure Cybersecurity firms.
Cloud spending is far outpacing traditional non-Cloud IT
spending.[8]
Asia continues to be the fastest growing area for Cloud
adoption rates and Digital Entertainment.[9]
Some of the biggest changes in the cloud space include a
more decentralised Cloud known as Hybrid or multi-Cloud, which is being powered
by the likes of IBM, and the increase healthcare spending on Cloud, which remains
amongst the fastest growing areas.
While Tesla saw a recent selloff, we continue to be positive
on the holding as it dominates EV sales in the US. Its Chinese factories are scaling up to new
production heights too. Tesla's
self-driving car will likely challenge ride-sharing apps Uber & Lyft in
just a few years. Battery and AI
technology provides it with a wide moat currently.
Big Cloud players such as Amazon and Microsoft are spending
big in the online gaming market with Microsoft just purchasing Bethesda Games
for over $7.5bn.[10] Gaming is approaching four-times the size of
the Hollywood movie industry - and is growing far faster![11]
Movie/video streaming has seen Netflix hit 200 million total
subscribers – with Disney+ expected to exceed 120 million subscribers shortly.[12]
Remote work is boosting demand for Cybersecurity services as
Amazon’s Cloud unit AWS now represents almost 60% of all Amazon's total
profits. The Cloud subscription model
ensures its profit margins are amongst the highest in IT.[13]
Constituent News
Our technology ETF's global mix of 115 holdings is representative of the
Digital Revolution. Our US exposure is currently 59.0%, with Asia 27.8% and
Europe at 12.6%. Most of our Top 10 and
largest holdings are between 1.2% - 1.8%, prior to rebalance and equal
weighting. Due to Blockchain’s
significant rerating, our Riot Blockchain holding gained 157.5% so far in 2021
and represents an 8.9% weighting. Unlike
the Nasdaq 100 and other technology benchmarks which are very overweight a few
Big Tech firms, ITEK. Our FAANG exposure
is under 7% currently versus the Nasdaq 100 at approximately 40%.
Our top performing contributors are listed below for February
– by subtheme and holdings. While
Blockchain clearly outperformed (Northern data up 29.3% and Riot
above 100%), Social Media, Future Cars, Genomics and Digital Entertainment had
the largest number of top contributors. Social
Media players showed impressive gains with Twitter (up 52.5%), Baidu
(20.6%), Pinterest (17.6%), Weibo (21.0%) and Alphabet
(10.7%).
Other star performers in February included Digital
Entertainment firms Evolution Gaming (up 27.90%), Bilibili the
Chinese gaming firm (10.61%) and Sea Ltd (8.8%). Future Cars were led by Aptiv PLC (up
12.2%), NXP Semiconductors (13.8%) and Ford (11.1%).
As the demand for digital ledgers and currencies grow during
COVID, we expect a number of Blockchain firms to join ITEK’s holdings at our
next rebalance.
Past performance is no guarantee of future performance.
Source of all data: Solactive. Data as of 28.02.2021
Top Contributors – February 2021
Holdings
|
Index Category
|
% Average Weight
|
Total Return (%)
|
Contribution to Return (%)
|
RIOT BLOCKCHAIN INC
|
Blockchain
|
7.88
|
113.16
|
4.80
|
TWITTER INC
|
Social Media
|
1.21
|
52.50
|
0.52
|
BAIDU INC - SPON ADR
|
Social Media
|
1.78
|
20.61
|
0.32
|
PINTEREST INC- CLASS A
|
Social Media
|
1.67
|
17.62
|
0.29
|
NORTHERN DATA AG
|
Blockchain
|
1.14
|
29.34
|
0.24
|
EVOLUTION GAMING
|
Digital Entertainment
|
1.04
|
27.90
|
0.24
|
BILIBILI INC-ADR
|
Digital Entertainment
|
1.93
|
10.61
|
0.22
|
WEIBO CORP-SPON ADR
|
Social Media
|
1.13
|
21.04
|
0.21
|
ARGENX SE
|
Genomics
|
1.00
|
15.00
|
0.15
|
APTIV PLC
|
Future Cars
|
1.14
|
12.16
|
0.14
|
NXP SEMICONDUCTORS NV
|
Future Cars
|
0.96
|
13.76
|
0.14
|
FORD MOTOR CO
|
Future Cars
|
1.11
|
11.11
|
0.13
|
CORTEVA INC
|
Genomics
|
1.01
|
13.60
|
0.13
|
FORTINET INC
|
Cyber Security
|
0.81
|
16.65
|
0.13
|
MICROCHIP TECHNOLOGY
|
Robotics & Automation
|
0.91
|
12.41
|
0.12
|
SEA LTD-ADR
|
Digital Entertainment
|
1.11
|
8.76
|
0.11
|
Past performance is no guarantee of future performance.
Source of all data: Solactive. Data as of 28.02.2021
Outlook
As new remote work patterns gain traction over the medium
term, Cloud Computing spending continues to dominate – exceeding all non-Cloud
spending on IT. AI and 5G are
facilitating the expansion of Edge computing which will boost Cloud
spending. The majority of corporate IT
budgets are now devoted to Cloud spending.
Hybrid/Multi-cloud usage is set to spike further, allowing
more services across public, private and edge environments. This will enable Healthcare, Digital Entertainment,
Social Media and AI-Robotics to scale up even faster.
Cybersecurity is likely to be a big beneficiary of the WFH
trends given the largest ever cyberattack recently on the US Government (Solar
Winds). The Biden Administration is planning for big cybersecurity spending
outlays, likely to exceed $10bn this year.[14]
The size of Blockchain is expected to grow from $3bn in 2020
to $39.7bn by 2025 - a CAGR of 67.3%.[15]
Blockchain is the underlying technology powering
Cryptocurrencies, but has many other uses. If Cryptocurrencies were a car, then
Blockchain is its motor. Key areas
Blockchain is already playing a role:
Digital IDs, Rewards/Loyalty programs, Copyright protection, Digital
voting, Real estate transfers, Medical records, Wills.
According
to Gartner Research blockchain technology is expected to create more than $176
billion dollars’ worth of business value by 2025 and $3.1 trillion by 2030
(below).
For illustrative purposes only. Past performance is no
guarantee of future performance. Source: https://media.consensys.net/gartner-blockchain-will-deliver-3-1-trillion-dollars-in-value-by-2030-d32b79c4c560
Product Details
HAN-GINS Tech Megatrend Equal Weight UCITS ETF (ITEK) is a
UCITS compliant ETF 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.
Visit the Technology ETF Fund Page for
more information.