Evolve Funds has launched a new ETF in Canada providing lightly leveraged exposure to a basket of popular US technology stocks.
Raj Lala, President and CEO of Evolve Funds.
The Evolve Enhanced FANGMA Index ETF has been listed on Toronto Stock Exchange where it is available to trade in CAD-hedged (Ticker: TECE CN), CAD-unhedged (TECE.B CN), and USD-unhedged (TECE.U CN) share classes.
The fund provides 125% of the daily performance of the Solactive FANGMA Equal Weight Index which consists of six technology giants as represented by the FANGMA acronym: Facebook (Meta), Amazon, Netflix, Google (Alphabet), Microsoft, and Apple.
The index is equally weighted and rebalanced quarterly.
The six firms represent some of the biggest technology and technology-enabled companies available in the US, accounting for more than $8.7 trillion in combined market capitalization, as of 4 March 2022.
The fund offers investors a liquid and convenient means to enact a light tactical view on six household technology names at a far lower price point than would be possible from the direct purchase of these companies’ shares.
While tech stocks have pulled back in recent months – the Solactive FANGMA Equal Weight Index is down 19.4% year-to-date – Evolve notes that each company is highly profitable and has posted record-breaking sales in their most-recent respective quarters.
Raj Lala, President and CEO of Evolve Funds, said: “Despite posting very strong returns in 2021, technology stocks have been under pressure recently on rising inflation, rate hike expectations, and geopolitical concerns. Over the past couple of years, however, FANGMA stocks have been significant contributors to market returns. Historically, these six tech giants have provided consistent earnings which could make this recent pullback a great time for investors to consider enhanced exposure to big tech.”
The ETF is the second FANGMA-tracking product from Evolve following the May 2021 launch of the Evolve FANGMA Index ETF (TECH CN) which offers unleveraged exposure to the same underlying index.
The newly launched TECE comes with a management fee of 0.50% which is slightly higher than TECH which costs 0.40%.