Invesco cross-lists biotech and fintech ETFs on Xetra

Oct 23rd, 2019 | By | Category: Equities

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Invesco has cross-listed the Invesco NASDAQ Biotech UCITS ETF and Invesco KWB NASDAQ Fintech UCITS ETF on Deutsche Börse Xetra.

Invesco biotech fintech etfs

Invesco has cross-listed its biotech and fintech ETFs on Xetra.

The funds provide exposure to US-listed stocks from firms operating in the high-growth sectors of biotechnology and financial technology.

Biotech

The biotech ETF is linked to the Nasdaq Biotechnology Index which reflects the performance of over 100 biotechnology and pharmaceutical companies listed on the Nasdaq stock market.

Constituents range from global giants with diverse portfolios to smaller companies focused on a single treatment.

Stocks are filtered to meet minimum market capitalization and liquidity requirements and are then weighted on a modified market capitalization basis: the largest five constituents are capped at 8%; the remaining constituents are capped at 4%. Reconstitution occurs annually in December, and the index is rebalanced quarterly.

As of 21 October 2019, the top five holdings in the fund were Celgene (8.5%), Gilead Sciences (8.2%), Amgen (7.7%), Vertex Pharmaceuticals (6.5%), and Illumina (6.4%).

The fund comes with an expense ratio of 0.40% and houses over $370 million in assets under management. The new share class trades on Xetra in euros under the ticker NBTK GR.

Fintech

The fintech ETF tracks the KBW NASDAQ Financial Technology Index which covers US-listed fintech companies with market capitalizations greater than $500 million. Constituent selection is overseen by a committee that defines fintech companies as those that use technology to deliver financial products and services, such as payments, financial data, exchanges, internet banks, specialty lenders and software.

The committee identifies finance-related firms that tend to have distribution systems that are nearly exclusively electronic, as opposed to via traditional bricks-and-mortar, and revenue mixes that are predominantly fee-based. Such firms typically leverage new assets such as advanced data aggregation and analysis, innovative technology, and creative thinking.

Constituents are weighted equally at each quarterly rebalance to ensure performance comes from across the sector and is not dominated by the largest players. By equally weighting constituents, the index aims to outperform a market-cap-weighted equivalent by increasing exposure to the risk premium associated with smaller cap stocks.

The index currently has 48 constituents, from household names such as Paypal and Visa to smaller, disruptive firms such as point-of-sale payment app Square.

The fund comes with an expense ratio of 0.59%, comprised of a 0.49% management fee and a 0.10% swap fee, and houses approximately $60m in AUM. The new share class trades on Xetra in euros under the ticker KFTK GR.

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