Global X has added two new funds to its thematic product suite with the launch of the Global X Data Center REITs & Digital Infrastructure ETF (VPN US) and the Global X CleanTech ETF (CTEC US).
Global X has expanded its thematic offering with the launch of digital infrastructure and clean tech ETFs on Nasdaq.
Listed on Nasdaq, the funds tap into two much-talked-about investment themes: digitalization and climate change.
Alex Ashby, head of product development at Global X ETFs, said, “With these new ETFs, investors have a unique opportunity to capture the global shift to clean technologies and the building of the digital infrastructure that will serve as the backbone for continued digital innovation.
“We’re thrilled to utilize our expertise in thematic investing to expand our offering to these critical areas.”
Both themes appear well-placed to prosper throughout the decade.
The emergence of digital technologies and growing connectivity across Internet-of-Things devices, combined with greater adoption of cloud computing, 5G, and artificial intelligence are almost certainly likely to drive robust demand for digital infrastructure assets, including data centers.
At the same time, the strengthening imperative to tackle climate change is proving a catalyst for technological innovation that can potentially mitigate this impending risk. As global efforts to reduce carbon emissions and fossil fuel dependency accelerate, companies involved in clean technology industries potentially stand poised to benefit.
Digital Infrastructure
The Global X Data Center REITs & Digital Infrastructure ETF tracks the Solactive Data Center REITs & Digital Infrastructure Index, an index reflecting the performance of companies that generate at least 50% of their revenues from data centers, cellular towers, and/or digital infrastructure hardware.
To be eligible for inclusion in the index, a company must have a market capitalization of at least $200 million ($160m for existing constituents), an average daily value traded in the last six months of at least $2m ($1.4m for existing constituents), and a free float of at least 10% or a free-float market capitalization of least $1 billion.
Companies can be listed in a developed market or Indonesia, South Korea, or Taiwan.
In terms of constituents, all data center and cellular tower companies are included up to a limit of 40. If there are fewer than 25 constituents, digital infrastructure hardware companies are included until the index reaches 25 index constituents.
The index is weighted by free-float market capitalization, subject to a maximum weight of 12% for data center and cellular tower companies, and a maximum weight of 2% for server and/or hardware companies. The minimum weight of a company is 0.30%. The aggregate weight of companies weighted above 4.5% is capped at 45%. The remaining companies are capped at 4.5%
The fund comes with a TER of 0.50%.
Clean Technology
The Global X CleanTech ETF tracks the Indxx CleanTech Index, an index reflecting the performance of companies that generate at least 50% of their revenues from the development of technology or equipment relating to renewable energy production, energy efficiency, smart grid implementation, lithium-ion batteries, fuel cells, or the prevention or amelioration of the negative environmental effects of pollution.
To be eligible for inclusion in the index, a company must have a market capitalization of at least $500 million ($400m for existing constituents), an average daily value traded in the last six months of at least $2m ($1.4m for existing constituents), and must have traded on 90% of trading days in the last six months, excluding recent eligible IPOs. Companies must also have a free float of at least 10% or a free-float market capitalization of at least $1 billion.
Companies can be listed either in a developed or an emerging market, excluding India.
The top 40 companies as measured by market capitalization that meet these criteria constitute the index. Constituents are weighted by market capitalization subject to a single security cap of 6% and a floor of 0.30%. The aggregate weight of all the constituents with a weight greater than 5% is capped at 40%. All remaining securities are capped at 4.5%.
The fund comes with a TER of 0.50%.