Singapore Exchange (SGX) and FactSet have launched a series of co-branded indices, designed to provide investors with exposure to regional and global themes including robotics, cybersecurity, and healthcare. The indices are likely to attract attention from ETF product developers, given the growing demand for thematic products – according to ETFGI, there were 447 thematic ETFs as of the end of 2016, up from 183 in 2012.
The four new indices come at a time when investors’ demand for thematic ETFs is on the rise.
The indices use the FactSet Revere Business Industry Classification System (RBICS) to enable granular industry analysis of companies based on revenue drivers. This provides a unique opportunity to tailor an index portfolio to specific themes for investors globally.
Jeremy Zhou, head of indexing at FactSet, commented: “Our mission with RBICS was to understand companies based on the products and services they deliver. The result is an industry classification that provides more than 1400 industry groups from which thematic portfolios can be created flexibly and accurately. We are pleased to collaborate with SGX Index Edge to launch FactSet’s first co-branded indices in Asia.”
SGX-FactSet Asia Technology Advantage EW Index tracks the performance of Asian securities with high annual revenues from forward-looking technology-related business segments that are poised for growth. Securities captured within the index include companies in data storage drives and peripherals, semiconductor assembly and packaging services, and cellular phones manufacturing business sectors. The index is equally weighted, and has a basket size of 50 stocks.
SGX-FactSet Global Cybersecurity Index tracks the performance of global securities with high revenue exposure to cybersecurity-related business segments. Securities captured within the index include companies with high revenue exposure to electronic security identification equipment, inspection and detection systems manufacturing, and network security software. The index has a basket size of 30 stocks, and is free-float market capitalization weighted with a 7% stock cap on each individual index constituent.
SGX-FactSet Global Robotics Index tracks the performance of global securities with large revenue exposure to robotics and automation. Securities captured within the index include companies primarily in automotive industry software, general factory automation makers and motion control, and precision motors manufacturing business segments. The index has a basket size of 40 stocks and is free-float market capitalization weighted with a 7% stock cap on each individual index constituent.
SGX-FactSet Asia Healthcare Select EW Index provides exposure to Asian companies primed at targeting Asia’s growing health concerns and demographic trends. These include the rising incidence of lifestyle diseases, obesity, and ageing populations. Securities captured within the index include companies with high revenue exposure to biopharmaceuticals, general clinical diagnostic devices and diversified patient care. The index is equally weighted, and has a basket size of 40 stocks.
Simon Karaban, head of SGX Index Edge, said: “SGX Index Edge is increasingly turning towards unique datasets to offer well-defined index portfolios for product issuers that allow them to better connect with the end investor. We are excited to partner with FactSet and this collaboration reinforces our approach to move beyond the traditional to provide innovative client-driven solutions.”