Tech Megatrend Monthly Report | May
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- Genomics, Digital Entertainment, Cybersecurity
and Robotics/Automation were big winners in April.
Computing spending remains strong and is set to double within 2 years (exceeding $500bn annually)
- Genomics has been rerated and is increasingly
mainstream in detecting and curing medical diseases.
Entertainment remains a key beneficiary from COVID lockdowns as 50 million more Americans played games in 2020.
- Blockchain remains the Technology ETF’s top
performer in 2021, despite falling in April.
- For 2021, Genomics and Digital Entertainment
are the other best performing subthemes.
- Blockchain will broaden out its uses - as
digital payments/fintech services rise in popularity.
- Biden’s huge stimulus plans are boosting spending
on Future Cars, Cybersecurity
Megatrend ETF (ITEK) Returns
Past performance is no guarantee
of future performance.
Source: Solactive, HANetf
Month figures based on 30.04.20 - 30.04.21
HAN-GINS Tech Megatrend Equal Weight UCITS ETF (ITEK) gained
2.90% in April and is up 12.49%for 2021.
ITEK continues to benefit from fast adoption rates across the Digital
For 2021, Blockchain is up 55.5%, Genomics 14.5%, Digital
Entertainment 9.2% and Robotics/Automation 6.9% - our winning themes. Despite April being a poor month for
Blockchain down 12.1% - Genomics, Cybersecurity and Cloud all enjoyed very good
gains up 10.2%, 8.5 and 5.6%.
Blockchain remained our standout subtheme, gaining 9.5%,
followed by Robotics (1.8%) and Genomics (0.6%). Social Media and Digital Entertainment were
our two weakest performers, although both are up for 2021 overall.
Due to recent rebalance, our equal weighted approach ensures
that all our eight subthemes are all currently between 10.6%-13.7% weightings
within ITEK. ITEK
has beaten most competitors over YTD, 6 months and 1 year.
Impressive April gains for a large number of Genomics players
included BioNTech (up 72.4%), Curevac (27.9%) and Mettler
(13.6%). These benefited from a strong
rerating as COVID vaccine rollouts occurred globally and biotech is
increasingly seen as a mainstream medical solution.
Robotics and Automation was another leading subtheme
performer. Top performers were Mediatek
(up 24.9%), Intuitive Surgical (up 17.1%), Will Semiconductors (19.3%)
and NVIDIA (12.5%). Digital
Entertainment players also showed strong performance this month led by Evolution
Gaming up 34.7%, Mango Media 18.5% and Sea Ltd up 13.1%. Cybersecurity saw top performance form Proofpoint
(36.8% gain), Okta 22.4% and Fortinet 10.7%.
Past performance is no guarantee of future performance.
Source of all data: Bloomberg. Data as of 30.04.2021
HAN-GINS Tech Megatrend Equal Weight UCITS
As of 30.04.21
HAN-GINS Tech Megatrend UCITS ETF
Solactive Innovative Technologies Index (NTR)
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 30/04/2021
China is likely to control four times the global market share
of Electric Vehicles compared to the US.
President Biden is using all the levers of government, from purchasing
power, R&D, tax, trade, and investment policies to ensure America become
the world’s leader in EV manufacturing, including all input materials and
The Biden Plan targets $174bn
to encourage the development, manufacture and purchase of EVs – via tax credits
and incentives. This includes $15bn for government agencies
to purchase EV car fleets, big subsidies for 500,000 EV charging stations,
and a large training program – the EV Infrastructure Training Program (EVITP). The target includes all new US-built buses being
zero-emissions by 2030.
Colonial Pipeline cyberattack, following so closely on the large Solar Winds
attack on US government data/IT systems, is driving more businesses to upgrade
their cybersecurity. Our holdings such as Crowdstrike and Palo Alto Networks
are well positioned to benefit from this renewed growth in demand.
The Biden Administration’s embrace of Green Energy and Gene
Sequencing has helped rerate ITEK’s holdings across Future Cars and Genomics. The
stimulus package is providing huge subsidies to carmakers and genomics funding.
Genomics holdings such as BionTech and Illumina
are well positioned as Gene Therapies become mainstream in the detection of
diseases and play a key role in Precision (customised) medicine.
ITEK’s global mix of 114 holdings is representative of the
Digital Revolution. Our US exposure is currently 58.7%, with Asia 24.8% and
Europe at 15.4%. Most of our Top 10
holdings are between 1.0% - 1.4%, prior to rebalance and equal weighting.
- ITEK is equally weighted across all 8 subthemes
and 114 underlying holdings.
- It is a rules-based index with broad
- Holdings of up to 15 per subtheme, are equally
- ITEK’s Top 5 holdings equal just 7%, and Top 10
only 12.3% of its portfolio. No overweight or concentrated positions.
- Provides equal exposure to all key Digital
- ITEK is considerably underweight large Megacaps
compared to competitors.
- Unlike Nasdaq and other tech benchmarks which remain
very overweight a few Big Tech players, ITEK’s FAANG exposure remains under 7%
- versus 40% in the Nasdaq 100.
Top performers in the first four months of 2021 include: Riot
Blockchain up 146.2%, BioNTech 131.0%, Evolution Gaming
95.5%, Galaxy Digital 113% (also our largest holding) and, Mediatek
(59.7%), Volkswagen (39.9%) and Fortinet 37.5%. A number of our themes are contribution to
performance. The biggest single addition
was adding 11 new Blockchain holdings in March – resulting in 13 total such
ITEK is a unique Tech ETF by adding Blockchain holdings as
an entirely separate subtheme. Our holdings are not all heavily correlated to
cryptocurrencies, but we do hold crypto miners, administrators and other
digital ledger players. As the demand for digital ledgers and cryptocurrencies
grow during COVID, we expect two more Blockchain firms to join ITEK’s holdings
at our next rebalance, rounding out this subtheme at 15 holdings.
Biden’s huge clean energy and infrastructure plans will
boost EV spending dramatically. The US
government banning the sale of traditional gas cars from 2035 - is
fast-tracking EV adoption rates.
Remote WFH behaviours will ensure 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.
The move away from hardware and onsite servers to remote
usage means Cloud is being hardwired into most corporation’s operations and
Demand for cybersecurity is expanding and likely to also be big
beneficiary of the WFH trends along with increasingly large cyberattacks. The Biden Administration is planning for big cybersecurity spending outlays, likely to exceed
$10bn this year.
Blockchain will become more mainstream as digital
fintech/global payments become the norm. If Cryptocurrencies were a car, then
Blockchain is its motor. Key areas of
Blockchain are already playing a role:
Digital IDs, Rewards/Loyalty programs, Copyright protection, Digital
voting, Real estate transfers, Medical records, Wills.
blockchain technology is
expected to create more than $176bn worth of business value by 2025 and $3.1
trillion by 2030.
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