Pacer ETFs has launched a new thematic equity ETF providing exposure to companies enabling the Fourth Industrial Revolution.
The Fourth Industrial Revolution encompasses the current trend of automation in manufacturing technologies.
The Pacer BlueStar Engineering the Future ETF (BULD US) has been listed on Nasdaq with an expense ratio of 0.60%.
The First Industrial Revolution refers to production through initial mechanization, water power, and steam; the second to mass production through the use of assembly lines and electricity; and the third to the incorporation of computer technology and automation within production lines.
The Fourth Industrial Revolution, also known as “Industry 4.0”, encompasses the current trend of automation and data exchange in manufacturing technologies. It is characterized by the convergence of several sub-themes including robotics and automation, machine-to-machine communications, 3D printing, 5G connectivity, cloud computing, big data, and cybersecurity.
Pacer’s new ETF has been designed to focus on three sub-themes that are most directly linked to the manufacturing process: robotics and automation, 3D printing, and computer-aided design software.
Sean O’Hara, President of Pacer ETF Distributors, said: “BULD provides exposure to the companies that are leading the technology, manufacturing, and engineering industries to new heights in The Fourth Industrial Revolution. It aims to follow the next generation of industrial automation that will support this societal change by enhancing supply chains, providing new solutions for mass customization, and much more.”
Joe Thomson, President and Founder of Pacer Financial, added: “At Pacer ETFs, it’s our mission to provide investors with investment opportunities that tap into societal changes and have the potential to transform the way businesses operate. This ETF could provide a new way for investors to capitalize on the next big technology revolution.”
Methodology
The fund is linked to the BlueStar Global Robotics & 3D Printing Index which selects its constituents from a universe of developed market stocks with market capitalizations above $500 million.
The index screens for companies deriving at least 50% of their revenues from the three targeted sub-themes.
Constituents are weighted by float-adjusted market capitalization while setting the combined weight of companies in the robotics and automation segment at 50%, the combined weight of companies in the 3D printing segment at 25%, and the combined weight of companies in the computer-aided design software segment at 25%. Individual positions are capped at 8%, and the index is reconstituted and rebalanced semi-annually.
As of 9 May, US-listed companies accounted for just under half (44.6%) of the total index weight with the next-largest country exposures being Japan (18.0%), the Netherlands (9.0%), France (7.3%), and Germany (6.8%).
Stocks in the software and semiconductor industries each accounted for roughly a quarter of the index weight, while electrical equipment and machinery also played significant roles with industry weights of 12% and 10%, respectively.
Notable positions included ASML (8.3%), Autodesk (7.8%), Dassault Systems (7.3%), Siemens (5.7%), and Applied Metals (5.2%).