ProShares has launched three new thematic equity ETFs focused on ‘new economy’ business segments including clean technology, smart factories, and big data and analytics.
Michael L. Sapir, CEO of ProShares.
Listed on NYSE Arca, the funds are the ProShares S&P Kensho Cleantech ETF (CTEX US), the ProShares S&P Kensho Smart Factories ETF (MAKX US), and the ProShares Big Data Refiners ETF (DAT US).
Each fund comes with an expense ratio of 0.58%.
Michael L. Sapir, CEO of ProShares, commented: “Each ETF is designed to offer investors exposure to a rapidly changing industry, from the automation of manufacturing, to enhanced analytics and big data processing, to powering the transition to clean energy. We are pleased to expand our family of ETFs with these new funds.”
Clean technology
Research from BloombergNEF estimates that global carbon emissions must decline by 30% between 2019 and 2030 for the world to stay on course for meeting the Paris Agreement’s goal of net-zero by 2050. Clean energy technologies are expected to play a pivotal role in this transition away from fossil fuels.
Growth in the clean energy segment is being powered by both public and private markets. The Biden administration has called for massive government spending on clean technology, while global companies like Goldman Sachs, Google, and Microsoft have also announced substantial commitments in this area.
The ProShares S&P Kensho Cleantech ETF seeks to tap into this growth by tracking the S&P Kensho Cleantech Index.
The index selects its constituents from a universe of US-listed stocks, including American Depository Receipts, of companies with market capitalizations above $100m and average daily trading volumes greater than $1m.
Security selection is powered by machine intelligence company Kensho Technologies which leverages its expertise in artificial intelligence to analyze large amounts of publicly available company data in order to identify firms that are tied to the clean technology theme. Kensho identifies both ‘core’ and ‘non-core’ companies based on the prominence of keywords in regulatory filings.
Qualifying firms include those developing renewable technologies in areas such as hydro, solar, wind, geothermal, hydrogen, and hydroelectric power, and companies that are installing these technologies for use in residential or commercial applications. Firms that are developing advanced energy storage devices, such as utility-scale batteries, are also eligible for inclusion.
Constituents are provisionally assigned an equal weight which is then adjusted to increase the index’s exposure to ‘core’ companies. The index is reconstituted annually and rebalanced on a semi-annual basis.
Smart factories
Smart factories aim to optimize the supply chain, improve production response times to changes in demand, and enhance production efficiency and recyclability. They seek to achieve these goals through computer-integrated manufacturing, interoperable systems, multi-scale dynamic modeling and simulation, intelligent automation, strong cybersecurity, and networked sensors.
Evolving technology, increasingly complex supply chains, and the forces of globalization are bolstering the growth of smart factories. According to a recent MarketsandMarkets report, the global market for smart factory technologies is projected to grow from $80 billion in 2021 to $135 billion in 2026, while more than 50% of manufacturers surveyed indicated that they are planning on implementing smart manufacturing initiatives in the near future.
The ProShares S&P Kensho Smart Factories ETF taps into this growth by tracking the S&P Kensho Smart Factories Index which utilizes a similar methodology as described above for the clean tech index.
Qualifying companies include those developing digitalized manufacturing technologies. Examples of such technologies are sensors and software that monitor and maintain equipment health, control advanced processes, identify product defects and anomalies, predict equipment results, and optimize plant energy consumption.
Big data
Data has become an important commodity for businesses, helping to unlock crucial insights that can improve efficiencies and reduce costs. According to a NewVantage Partners survey of Fortune 1000 companies, 92% of corporate executives say the pace of their big data and AI investments has accelerated, while 81% were optimistic about the future of AI and big data in their firms.
This has presented a significant growth opportunity for companies specializing in managing and analyzing structured and unstructured data sets. A 2021 Expert Market Research Report found that the global big data market is projected to grow to $450bn by 2026, up from $208bn in 2020.
The ProShares Big Data Refiners ETF offers a vehicle to access this growth story through tracking the FactSet Big Data Refiners Index.
The index selects its constituents from a universe of developed and emerging market stocks with market capitalizations above $500m and average daily trading volumes greater than $1m.
Constituents must derive at least 75% of their revenue from nine industries related to the big data theme (as defined by FactSet’s Revere Business Industry Classification Standard): business intelligence software, business intelligence/data warehousing consulting, customer service software, data storage infrastructure software, enterprise middleware software, government and public service industry software, information storage systems, network administration software, and peripheral equipment makers.
Constituents are weighted by float-adjusted market capitalization subject to an individual cap of 4.5%. The index is reconstituted and rebalanced semi-annually.
ProShares’ offers a further three thematic equity ETFs targeting retail disruption, infrastructure, and pet care investment themes.