Global X makes big push into Europe with seven new thematic ETFs

Nov 19th, 2021 | By | Category: Equities

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New York-headquartered Global X has made a big push into the European ETF market with the launch of seven new thematic equity UCITS ETFs.

Luis Berruga, CEO of Global X

Luis Berruga, CEO of Global X.

They include strategies targeting autonomous & electric vehicles, e-commerce, robotics & AI, cybersecurity, clean technology, fintech, and the internet of things.

The funds are linked to indices from Solactive and Indxx and join five existing thematic equity ETFs targeting video games & eSports, telemedicine, US infrastructure, genomics & biotechnology, and cloud computing.

Listings are maintained across Europe on the London Stock Exchange, Deutsche Börse Xetra and Borsa Italiana.

Luis Berruga, CEO of Global X, based in New York, commented: “Over the past several years, Global X has developed the infrastructure to be a leading ETF issuer, not just in the US, but in key markets in Europe and around the world. This latest launch is representative of the firm’s rapid European growth, and we’re thrilled to be able to offer investors targeted exposure to companies around the world driving long-term, paradigm-shifting themes.”

Rob Oliver, Head of Business Development in Europe for Global X, added: “Digital transformation of the global economy continues to be a major driver of change throughout the value chain, challenging traditional investment frameworks. Accurately capturing firms leading in disruptive themes requires a forward-looking investment approach to identify the fast-growing trends of the next decade. Through thematic investing, investors can gain targeted exposure to disruptive themes within which we expect to see huge investment and advancements over the next decade.”

The funds

The Global X Autonomous & Electric Vehicles UCITS ETF (DRVE) tracks the Solactive Autonomous & Electric Vehicles v2 Index. The index harnesses Solactive’s natural language processing algorithm to select a certain number of developed market stocks with the strongest links to the sub-themes of electric vehicles (top 15 companies selected), electric vehicle components (30 companies), and autonomous vehicle technology (also 30 companies). Constituents are weighted by float-adjusted market capitalization subject to a single stock cap of 3%.

DRVE has an expense ratio of 0.50%.

The Global X E-commerce UCITS ETF (EBIZ) tracks the Solactive E-commerce v2 Index. The index also uses Solactive’s natural language processing algorithm to select 40 primarily developed market stocks with significant exposure to the e-commerce theme. Constituents are weighted by float-adjusted market capitalization subject to a single stock cap of 4%.

EBIZ has an expense ratio of 0.50%.

The Global X Robotics & Artificial Intelligence UCITS ETF (BOTZ) tracks the Indxx Global Robotics & Artificial Intelligence Thematic v2 Index. The index targets the 100 largest developed market stocks of companies deriving at least 50% of their revenue from four sub-themes: industrial robots & automation, unmanned vehicles & drones, non-industrial robots, and artificial intelligence. Constituents are weighted by float-adjusted market capitalization subject to an individual cap of 8% and a cumulative cap of 40% on all stocks with weights above 5%.

BOTZ has an expense ratio of 0.50%.

The Global X FinTech UCITS ETF (FINX) tracks the Indxx Global FinTech Thematic v2 Index which has a similar methodology to the robotics & AI index. It selects the 100 largest developed market stocks of companies that derive ‘a significant proportion’ of their revenue from six sub-themes: P2P & marketplace lending, mobile payments, crowd-funding, blockchain & alternative currencies, personal finance software & automated wealth management, and enterprise solutions. Constituents are weighted by float-adjusted market capitalization subject to an individual cap of 6% and a cumulative cap of 40% on all stocks with weights above 5%.

FINX has an expense ratio of 0.60%.

The Global X Internet of Things UCITS ETF (SNSR) tracks the Indxx Global Internet of Things Thematic v2 Index. The index also carries out a similar methodology, selecting the 100 largest developed market stocks of companies that derive more than 50% of their revenue from four sub-themes: semiconductors & sensors, networking infrastructure, equipment & infrastructure technology, and consumer IoT technology. Constituents are weighted by float-adjusted market capitalization subject to an individual cap of 6% and a cumulative cap of 40% on all stocks with weights above 5%.

SNSR has an expense ratio of 0.60%.

The Global X Cybersecurity UCITS ETF (BUG) tracks the Indxx Cybersecurity v2 Index. The index screens a universe of developed and emerging market stocks to select the largest 40 companies deriving at least 50% of their revenue from 12 FactSet RBICS industries that collectively represent the cybersecurity theme. Constituents are weighted by float-adjusted market capitalization subject to an individual cap of 6% and a cumulative cap of 40% on all stocks with weights above 5%.

BUG has an expense ratio of 0.50%.

The Global X CleanTech UCITS ETF (CTEK) tracks the Indxx Global CleanTech v2 Index. The index uses a similar methodology as the cybersecurity index, selecting the largest 40 companies deriving at least 50% of their revenue from 20 FactSet RBICS industries that collectively represent the clean technology theme. According to Indxx, the process captures a diverse range of cleantech firms including those involved in renewable energy production, residential and commercial energy efficiency, smart grid implementation, lithium-ion batteries and fuel cells, and pollution mitigation.

CTEK has an expense ratio of 0.50%.

Thematic space

Global X has established itself as a leader in thematic investing in the US, where it offers more than 30 thematic ETFs corresponding to some $21 billion in assets under management.

While its nascent European franchise is backed up by this pedigree, the operation faces stiff competition with the likes of iShares, LGIM, First Trust, HANetf, VanEck and Rize already having made useful early strides forward (first-mover advantage is perceived as highly advantageous) in the thematic segment in Europe and others such as Lyxor/Amundi, WisdomTree and DWS pro-actively stepping up their thematic game.

One thing is for sure, however, Global X’s full-throated arrival in Europe spells great news for fund selectors and portfolio managers, bringing with it new innovation and greater choice, and, in all likelihood, driving thematic fees down.

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