Solactive has unveiled a new thematic index family providing exposure to companies that stand to benefit from significant long-term socio-economic megatrends.
Axel Haus, Team Head of Qualitative Research at Solactive.
The Solactive Future Trends Index Series consists of 17 equity indices and one bond index, each based on its own unique megatrend.
The equity indices are derived from the Solactive GBS Developed Markets Large & Mid Cap Index which represents a universe of large and mid-cap stocks listed in developed markets globally.
The bond index is derived from the parent Solactive Broad Global Developed Government Bond Index which consists of sovereign bonds issued by developed market countries.
The 18 indices can be divided into four broad thematic categories: Future Technologies, Future of the Environment, Future Way of Life, and Future Health and Well-Being.
Many of the indices are driven by Solactive’s proprietary Natural Language Processing engine called ARTIS (Algorithmic Theme Identification System) which provides potential constituents with a thematic score indicating how closely aligned the firm is to the underlying theme. ARTIS analyses large volumes of company reports, financial news, and business descriptions in calculating thematic scores.
Where ARTIS is not utilized, constituent selection is based on Solactive’s industry classification hierarchy or data from third-party firms that provide analytics for the underlying theme. Such firms include ISS ESG, the responsible investment arm of Institutional Shareholder Services (ISS); Vigeo Eiris, a corporate social responsibility ratings firm; and Equileap, a provider of insights on gender equality in the corporate sector.
The indices are suitable to be used as the underlying for new investment products, including ETFs.
Solactive notes that product providers may also mix and match different indices to create bespoke solutions, making it possible to create products based on broader multi-thematic concepts.
The index series consists of the following indices:
Future Technologies
Solactive Fast-growing Technology Companies Index
Solactive ARTIS Worldwide Connectivity Index
Solactive ARTIS AI and Automation Index
Solactive ARTIS Big Data Users Index
Future of the Environment
Solactive ARTIS Sustainable Energy Index
Solactive ARTIS Sustainable Transportation Index
Solactive ISS ESG Beyond Plastic Waste Index
Solactive Vigeo Eiris Biodiversity Index
Solactive Renewable Capacity Weighted Bond Index
Future Way of Life
Solactive ARTIS Future of Entertainment Index
Solactive Beyond Basic Consumption Index
Solactive Fast-growing Consumer Companies Index
Solactive Equileap Gender Equality Index Family
Future Health and Well-Being
Solactive Fast-growing Healthcare Companies Index
Solactive ARTIS Machines in Healthcare Index
Solactive ARTIS Biotechnology Index
Solactive ARTIS Oncology Index
Solactive ARTIS Future of Nutrition Index
Timo Pfeiffer, Chief Markets Officer at Solactive, commented, “Thematic investing gains in importance in the passive asset management industry, and the Solactive Future Trends Index Series is our answer to the developments in the field of megatrend investing. It is a living and breathing index family that constantly evolves and progresses as we observe new opportunities to create innovative index strategies mirroring vital and, potentially, Earth-shattering trends.”
Axel Haus, Team Head of Qualitative Research at Solactive, added, “The world continues to change at a fast pace. However, it is difficult to predict what the next life-changing innovation will be. Based on today’s research and knowledge, we focus on the beneficiaries of multi-year megatrends. The Solactive Future Trends Index Series provides the means to incorporate the most promising future economic trends into long-term oriented investment strategies.”