Paris-headquartered issuer Amundi has launched two new equity ETFs – the Amundi Smart City UCITS ETF and Amundi Smart Factory UCITS ETF – providing exposure to companies aligned with the investment themes of ‘smart cities’ and ‘smart factories’.
Fannie Wurtz, Head of Amundi ETF, Indexing and Smart Beta.
Both ETFs are linked to Solactive indices and invest in developed market and emerging market stocks.
They have been listed on Euronext Paris and Euronext Amsterdam.
Smart City
So-called smart cities use data and technology (primarily through ‘Internet of Things’ sensors) to create efficiencies, improve sustainability, and enhance the quality of life.
Data collected from citizens, devices, and assets are analyzed to manage and improve infrastructure such as traffic and transportation systems, power plants, water supply networks, waste management, crime detection systems, information systems, schools, libraries, and hospitals.
The Amundi smart cities ETF provides exposure to this theme by tracking the Solactive Smart City Index which selects its constituents from a universe of global stocks with market capitalizations greater than €1 billion and average daily trading values of at least €5 million.
The methodology first draws upon research from ISS ESG, the responsible-investment arm of Institutional Shareholder Services (ISS), to exclude firms involved with controversial weapons as well as those that are in violation of the UN’s Global Compact principles.
The remaining firms are then screened according to the FactSet Revere Business Industry Classification System (RBICS) to assign relevant firms to one of six categories – public infrastructure, smart homes, e-commerce, healthcare, entertainment, and technology.
Eligibility for the above categories is based on company business activities that are related to the development of smart cities including smart mobility, smart infrastructure, smart waste management solutions, smart security, Internet of Things, and wireless connectivity, amongst others.
Each of the six index categories is weighted equally and, within each category, each constituent is weighted equally, subject to a maximum index security weight of 2%. The index is reconstituted and rebalanced quarterly.
The fund has been listed in Paris in euros (SCITY FP) and in Amsterdam in US dollars (SCITY NA).
Smart Factory
Smart factories aim to optimize the supply chain, improve production response times to changes in demand, and enhance production efficiency and recyclability. They seek to achieve these goals through computer-integrated manufacturing, interoperable systems, multi-scale dynamic modeling and simulation, intelligent automation, strong cybersecurity, and networked sensors.
The Amundi smart factory ETF provides exposure to the theme by tracking the Solactive Smart Factory Index which adheres to a similar methodology to that of the index underpinning the smart city ETF.
The parent universe undergoes ISS ESG’s socially responsible evaluation before the remaining constituents are screened according to the FactSet RBICS. Relevant firms are assigned to one of five categories – advanced robotics, cloud & big data, cybersecurity, augmented reality & 3D printing, and the Internet of Things (IoT) based on business activities related to the smart factor theme. These activities include factory automation, enterprise management software, network security software, virtual reality engineering software, and household robot makers, amongst others.
The index utilizes the same weighting methodology as in the smart cities index.
Similarly, the fund has been listed in Paris in euros (SFTRY FP) and in Amsterdam in US dollars (SFTRY NA).
Artificial Intelligence
The two new funds complement an existing thematic technology ETF from Amundi – the Amundi Stoxx Global Artificial Intelligence UCITS ETF – which launched in September 2018. This fund tracks the Stoxx AI Global Artificial intelligence ADTV5 Index, providing exposure to equities listed globally that are closely related to the theme of artificial intelligence (AI).
Fannie Wurtz, Head of Amundi ETF, Indexing, & Smart Beta, commented, “Innovation is in our DNA, and we are always looking for new opportunities for investors. With our Artificial Intelligence ETF, and now these new Smart City and Smart Factory ETFs, we can help investors to capitalize on three of the major themes that are shaping our future.”
All three ETFs come with an expense ratio of 0.35%.