Horizons launches thematic ETF targeting “Industry 4.0” sectors

Nov 7th, 2018 | By | Category: Equities

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Horizons ETFs Canada has launched the Horizons Industry 4.0 Index ETF (FOUR US) on Toronto Stock Exchange.

Horizons Solactive Industry 4.0 Thematic ETF

The ETF provides exposure to five innovative sectors that are closely linked to the current trend of automation and data exchange in manufacturing technologies.

The ETF tracks companies across five innovative technology sectors: advanced robotics, augmented reality & 3D printing, cloud & big data, cyber security and the ‘internet of things’.

Collectively, the sectors are designed to provide investors with exposure to the broader theme of “Industry 4.0” – the name given to the current trend of automation and data exchange in manufacturing technologies.

This shift has also been referred to as the “fourth industrial revolution”, where the first revolution refers to production through initial mechanization, water power and steam; the second to mass production through the use of assembly lines and electricity; and the third to the incorporation of computer technology and automation within production lines.

According to Horizons, 3D printing makes fabrication of components much more flexible, cost effective, distributed, and on-demand, while augmented reality helps to speed up the production chain and has a significant impact on maintenance costs.

Cloud solutions and big data allow real-time communications for production systems as well as real-time decision-making support and optimization, while the internet of things provides a monitoring tool to control and access infrastructure across the network.

And due to an increasingly connected, online world, the importance of cyber security has become paramount to protect the integrity of the software overseeing automated industries.

“With the continued increase in computer processing power and more and more use of transformative technologies such as AI, I believe we are embarking on one of the most revolutionary periods of technological change – Industry 4.0,” said Steve Hawkins, President and CEO of Horizons ETFs. “FOUR seeks to provide broad global exposure to companies leading the charge in the five key sectors associated with Industry 4.0.”

The fund tracks the Solactive Industry 4.0 Index. To be eligible for inclusion in the index, companies must be listed on a developed market stock exchange and have a minimum market capitalization of at least $200 million as well as a minimum average daily value traded of at least $2m.

The methodology uses FactSet’s Revere Business Industry Classification System (RBICS) to locate which firms operate primarily within the above five sectors. For each of the five categories the index selects the top ten companies based on market capitalization except for the internet of things sector where constituents are chosen based on the highest R&D-to-sales ratio.

Each of the five index categories and their individual components are weighted equally.

The fund trades in US dollars and comes with a management expense ratio of 0.65%.

“FOUR is our latest offering that gives investors broad exposure to the rise of emerging technologies, through our leading line-up of thematic ETFs,” said Hawkins. “From Canada’s first global robotics equity ETF, RBOT, to our blockchain-ecosystem ETF, BKCH, to the world’s first A.I.-driven global equity ETF, MIND, Horizons ETFs is committed to providing investors with a way to invest in the technologies accelerating Industry 4.0 – and now, they can access it all through FOUR.”

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