Global X has launched a new thematic equity ETF targeting companies positioned to benefit from innovations in property technology.
Pedro Palandrani, Director of Research at Global X ETFs.
The Global X PropTech ETF (PTEC US) has been listed on Nasdaq with an expense ratio of 0.50%.
According to Global X, innovations in property technology are set to significantly disrupt the real estate sector in the coming years.
Property management software, internet-of-things-based property monitoring, and virtual & augmented reality tours are just some of the ways that new property technologies are changing the way people buy, sell, rent, design, construct, manage, research, and market residential and commercial properties. PTEC is designed to assist investors in tapping into this growth theme.
Pedro Palandrani, Director of Research at Global X ETFs, commented: “The process of both finding and maintaining a home is becoming increasingly reliant on cutting-edge technologies and real estate digitization. With the launch of PTEC, Global X is leveraging its expertise in thematic investing to offer investors exposure to companies investing in the technology that should meet the needs of this vast, addressable market.”
Methodology
The fund is linked to the proprietary Global X PropTech Index which selects its constituents from a universe of developed and emerging market stocks with market capitalizations above $200 million and average daily trading volumes greater than $2m.
The methodology screens for companies generating at least 50% of their revenue from property management software, online property marketplaces, real estate research and analytics platforms, smart home security systems, and virtual or augmented reality solutions.
Hotel booking platforms, real estate investment trusts (REITs), and real estate brokerage companies that generate the majority of their revenue through commissions are not considered for selection.
The index selects the largest 50 eligible companies and weights them by float-adjusted market capitalization subject to an individual security cap of 8% and an aggregate cap of 40% on all stocks with weights above 5%.
As of 13 April, US-listed stocks accounted for nearly two-thirds (63.3%) of the index weight with the next-largest country exposures being Denmark (10.8%), China (9.3%), Australia (7.5%), and the UK (4.7%).
Information technology stocks made up the largest sector exposure at 36.5% of the index weight followed by real estate (19.2%), communication services (17.4%), consumer discretionary (12.2%), and industrials (11.6%).
Notable positions included KE Holdings (8.2%), CoStar Group (7.6%), Black Knight (7.4%), Airbnb (7.4%), ProCore Technologies (6.9%), and Nemetschek (6.3%).