DWS has unveiled a suite of four thematic ETFs targeting innovative technologies that are expected to have a significant impact on society and the economy in the future.
DWS has introduced a suite of thematic ETFs targeting innovative technologies.
Listed on Deutsche Börse Xetra in euros, three of the new funds target genomics, fintech, and next-generation internet, while the fourth is a broad innovation ETF that captures companies from across multiple technology themes.
They are the Xtrackers MSCI Genomic Healthcare Innovation UCITS ETF (XGEN GY), Xtrackers MSCI Fintech Innovation UCITS ETF (XFNT GY), Xtrackers MSCI Next Generation Internet Innovation UCITS ETF (XNGI GY), and Xtrackers MSCI Innovation UCITS ETF (XNNV GY).
Each ETF comes with an expense ratio of 0.35%.
The funds are linked to indices that were developed by MSCI in partnership with ETF issuer and disruptive technology specialist ARK Invest.
Each index is based on the MSCI ACWI universe of large and mid-cap stocks across 23 developed and 24 emerging market countries.
The methodology is driven by insights from ARK Invest which derives “economic relevance scores” for each firm to assess the strength of the company’s link to the relevant theme. The score is based on the percentage of revenue derived from eligible business segments as well as the cumulative frequency of keywords in public descriptions of the company’s business activities. Firms with economic relevance scores of at least 25% will be selected to form the index.
Constituents are weighted using a combination of their economic relevance scores and their float-adjusted market capitalizations with issuer weights capped at 5%. Index reconstitution and rebalancing occur semi-annually, while the words used to determine index eligibility are reviewed annually.
The indices
The MSCI ACWI IMI Genomic Innovation Index tracks companies that derive significant revenues from genomic sequencing, synthesis, analysis or instrumentation, biocomputing, bioinformatics, molecular diagnostics, and agricultural biotechnology.
The MSCI ACWI IMI Fintech Innovation Index tracks companies that derive significant revenues from technological innovation in the financial sector.
The MSCI ACWI IMI Next Generation Internet Innovation Index tracks companies that derive significant revenues from the migration of technology infrastructure to the cloud, the increased use of shared technology, infrastructure and services, as well as the increased adoption of internet-based products and services, new payment methods, big data, the internet of things, and social media.
The MSCI ACWI IMI Innovation Index is constructed by equally weighting “high exposure” versions of the above three indices as well as a fourth index targeting Autonomous Technology & Industrial Innovation. Each high exposure index consists of the top half of the securities from its respective thematic index when ranked by economic relevance score.