GinsGlobal Index Funds and its white-label partner HANetf are set to make changes to two ETFs that target the global cloud technology and healthcare innovation investment themes.
Anthony Ginsberg, Founder and Managing Director of GinsGlobal Index Funds.
Effective 9 April, the funds will adopt new index strategies that expand the constituent base and utilize an equally weighted approach to portfolio construction.
Each ETF will be renamed to better reflect its updated investment approach.
Additionally, the funds will now apply a light ESG screen to remove companies that are violating international norms or are conducting activities in the controversial weapons or fossil fuel industries.
According to Anthony Ginsberg, Founder and Managing Director of GinsGlobal Index Funds, the new indices enhance the funds’ ability to capture opportunities related to cloud and healthcare innovation – two themes that have developed rapidly due to the Covid-19 pandemic.
Ginsberg said: “2020 was transformational for cloud and healthcare innovation as the pandemic and global lockdowns accelerated trends that were already underway. The switch to the digital world for work and leisure is likely to continue and will require continuing expansion of computational power while demand for innovative healthcare solutions will keep growing, boosting companies in the sector.
“Changing the index methodology to expand the constituent base and add sub-themes which have grown in importance means both funds can ensure investors are positioned to benefit from newly emerging trends with high growth rates which the switch to equal weighting underpins. Incorporating basis ESG screens ensures we are aligned with what investors expect.”
Hector McNeil, co-CEO of HANetf, added: “The HAN-Gins ETFs are an important part of the ever-expanding and market-leading HANetf thematic ETF range. Over the last few years, the world has changed dramatically and expedited many megatrends, especially in technology and healthcare. There has also been a march for ESG principles to become more mainstream in asset management. The new indices for SKYY and WELL have greatly enhanced both ETFs for these trends and HANetf now has a wide selection of equally weighted products available.”
Cloud technology
The HAN-GINS Cloud Technology UCITS ETF will begin tracking the Solactive Cloud Technology Equal Weight Index. In line with this, it will be renamed the HANS-GINS Cloud Technology Equal Weight UCITS ETF (SKYY LN).
As with the fund’s existing index, the new index covers companies listed in both developed and emerging markets. Constituent selection is based on Solactive’s proprietary natural language processing tool, Algorithmic Theme Identification System (ARTIS).
ARTIS uses unconventional data sources to identify firms most aligned with three major cloud-related sub-themes: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). SaaS will have greater importance in the portfolio.
The new index broadens the final constituent count from 50 to 75 and equally weights each stock.
SKYY houses $30 million in assets and comes with an expense ratio of 0.59%.
Healthcare innovation
The HAN-GINS Indxx Healthcare Innovation UCITS ETF, meanwhile, will commence tracking the Indxx Global NextGen Healthcare Index. It will be renamed the HAN-GINS Indxx Healthcare Megatrend Equal Weight UCITS ETF (WELL LN).
The index similarly chooses its constituents from a universe of developed and emerging market stocks, selecting pure-play healthtech innovators that generate more than 50% of their revenues from at least one of the following sub-themes: bioinformatics, bioengineering, genome sequencing, healthcare trackers, nanotechnology, neuroscience, robotics, and medical devices.
The new methodology includes an additional sub-theme, that of telemedicine, which has performed strongly during the pandemic. Sub-themes are capped to enhance diversification.
This index also equally weighted, meaning smaller, innovative firms can contribute more significantly to performance compared to the previous market-cap-weighted index.
WELL houses $20m AUM and costs 0.59%.
The HAN-GINS ETFs are listed on London Stock Exchange, Borsa Italiana, Xetra, Cboe Europe, and SIX Swiss Exchange.