Thematic technology ETFs bounce back

Mar 13th, 2019 | By | Category: Equities

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The rebound in technology stocks, following the sector’s sell-off at the end of 2018, has led to impressive gains for thematic technology ETFs at the beginning of 2019, according to European white-label ETF issuer HANetf.

Tech rebound leads to strong gains for HANetf’s thematic funds

HANetf has reported strong performance for its thematic technology ETFs following a rebound in the technology sector.

HANetf’s three funds, which provide exposure to EM internet and e-commerce stocks, innovative and disruptive technology companies, and cloud computing firms, are up 18.6%, 17.8% and 16.9% respectively year-to-date.

HANetf debuted its first product – the EMQQ Emerging Market Internet and E-commerce UCITS ETF (EMQQ LN) – on London Stock Exchange in September 2018.

The fund is linked to the EMQQ Index and provides exposure to companies driving the growth of online consumption in the developing world. To be included in the index, companies must derive more than half their profits from e-commerce or internet activities within emerging or frontier markets.

The issuer followed up with the introduction of two more ETFs – ITEK and SKYY – in October that were brought to market in partnership with GinsGlobal Index Funds.

The HAN-GINS Global Innovative Technologies ETF (ITEK LN) is linked to the Solactive Innovative Technologies Index and comprises companies involved in innovative and disruptive trends across a broad range of industries including robotics & automation, cloud computing & big data, cyber security, future cars, genomics, social media, augmented & virtual reality, and blockchain industries.

The HAN-GINS Cloud Technology UCITS ETF (SKYY LN) tracks the Solactive Cloud Technology Index, consisting of companies globally operating in the field of cloud-based software and services.

According to HANetf, drivers of the technology recovery include impressive fourth quarter 2018 earnings from the FAANGS and many smaller technology players. Strong share price performance from Apple led to the firm once again being crowned the world’s most valuable company with a market cap of $821bn.

While the technology sector as a whole has outperformed the broader equity market, HANetf attributes the additional growth of its ETFs to strong performance within the cloud technology space.

The firm notes key activities within the cloud ecosystem in Q4 2018 includes Microsoft’s Azure Cloud group, Amazon’s AWS, and Alibaba’s cloud unit reporting sales growth of 76%, 45%, and 84%, respectively. Additionally, cloud researcher Canalys estimated that cloud-infrastructure spending climbed 46% in the fourth quarter to $23 billion, ensuring total investment for 2018 exceeded $80bn – a record.

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