Exchange Traded Concepts, in partnership with Eve Capital, has launched the Wearable Technologies ETF (Bats: WEAR), the first exchange-traded fund to exclusively focus on companies that are engaged in the manufacture and sale of wearable devices.

The Wearable Technologies ETF (Bats: WEAR) invests in companies that are engaged in the manufacture and sale of wearable devices as well as those firms manufacturing components used in the creation of wearable devices.

While most users may know the boom in wearable technology as it relates to smart watches and tracking devices used for recreational or sports and fitness purposes, the technology is increasingly being used by businesses, the military and government, and the healthcare sector. According to Forrester Research, 76% of global tech and business leaders have wearables on their agenda as a tool to harness data and enhance customer interaction.

Examples of wearable devices include: activity trackers, smart watches, smart glass, body cameras, health monitors, virtual reality headsets, hearables, and wearable industrial computers.

“The wearable industry is very exciting and changing rapidly,” said J. Garrett Stevens, CEO of Exchange Traded Concepts. “The WEAR ETF allows investors to participate in the breakthrough technologies and sales channels that we believe will continue to drive growth in this market. We are proud to deliver this product to the market.”

By seamlessly integrating computer and monitoring functionality into our daily lives, the wearable technology industry is expected to be boosted as the devices serve as “free agents” in the Internet of Things.

“Wearable devices are changing the way people work and play. They are becoming more and more a part of our daily lives,” said Bryce Tillery, Chief Executive Officer of Eve Capital. “We think this trend will continue far into the future as devices become smaller and faster and new technologies enable more uses for wearable devices.”

According to International Data Corporation, the worldwide wearable device market is expected to reach a total of 111 million units shipped in 2016. By 2019, total shipments are expected to reach 214 million units, resulting in a five-year compound annual growth rate of 28%.

The fund tracks the Wearables Index, developed by EQM Indexes. Companies eligible for inclusion in the index must have a market capitalization of at least $300m and an average daily traded value of at least $2m over the last six months.

The index is composed of “core” holdings, companies which derive a significant portion of their revenues from the sale of technology devices that can be worn on the body, and ‘non-core’ holdings, those which derive minimal revenue from wearable devices as well as firms involved in the manufacture of components used in wearable devices, such as semiconductors, sensors, and displays.

Constituents are assigned an equal weight in the index at each semi-annual rebalance but “core” holdings are subject to a multiplier of 1.5 times the equal weight.

As of 1 December 2016, the index has 54 holdings, 35 of which are US-based companies (approximately 64% combined weight in index). Japan and Switzerland provide the next largest country exposures at roughly 6% each. Not surprisingly, technology is the largest sector allocation claiming over half the index’s weight (59%), followed by healthcare as the the second-largest sector (22%) and consumer discretionary (19%). WEAR’s equal-weight index allocates 37% of its weight to large-caps, 48% to mid-caps and the remaining 15% to small-cap stocks.

The index includes notable companies such as Garmin (3.1%), Seiko (3.1%), Apple (3.0%), GoPro (2.7%),  Boston Scientific (2.6%), and Fitbit (1.7%).

The fund’s total expense ratio is 0.85%.