London-based thematic issuer Rize ETF, which debuted in February 2020, has registered its funds for distribution in the Netherlands, Denmark, Sweden, and Finland.
The ETFs provide exposure to firms that are linked to the cybersecurity and medical cannabis industries.
The Rize Cybersecurity and Data Privacy UCITS ETF and Rize Medical Cannabis and Life Sciences UCITS ETF provide equity exposure to firms linked to cybersecurity and medical cannabis investment themes.
Both ETFs are UCITS-compliant and were already registered for distribution in the UK, Germany, Italy, and Ireland.
The funds have been designed in collaboration with index operator Foxberry and specialist research providers Tematica Research and New Frontier Data.
Cybersecurity
The Rize Cybersecurity and Data Privacy UCITS ETF tracks the Foxberry Tematica Research Cybersecurity & Data Privacy Index which selects its constituents from a universe of developed and emerging market stocks with market capitalizations greater than $100 million.
Using insights from Tematica Research, the methodology identifies those firms that have a minimum 50% revenue exposure to the cybersecurity theme.
The index also incorporates ESG considerations within its construction, a move that differentiates it from existing cybersecurity indices. Specifically, the index removes companies engaged in the aerospace and defence sector thereby excluding firms such as BAE Systems, General Dynamics, and Thales which are involved with controversial weapons.
The remaining constituents are assigned to one of two company classification groups – Product Providers and Service Providers.
Product Providers offer hardware or software that is installed locally and the majority of computing processing power is provided by the end-customer. An example of a company in this space would be one whose product is downloaded and installed by the customer on their computer or network.
Service Providers offer hardware or software that is accessed remotely and the majority of the computing processing power is provided by the service provider. An example of a company in this space would be one whose services involve the customer routing web traffic through the service provider’s servers through which the service provider performs real-time analysis and issue resolution.
The weight of each company classification group within the index reflects the relative total market capitalization of the constituents within each group. Within each group, however, company weights are set to favour those firms with a higher percentage revenue exposure to the cybersecurity theme as well as those with greater stock liquidity.
The index is reconstituted and rebalanced on a semi-annual basis.
The fund comes with an expense ratio of 0.45%.
It is listed on the London Stock Exchange in USD (CYBR LN) and GBP (CYBP LN) and on Deutsche Börse Xetra (RCRS GY) and Borsa Italiana (CYBR IM) in EUR.
Medical cannabis
The Rize Medical Cannabis and Life Sciences UCITS ETF replicates the Foxberry Medical Cannabis & Life Sciences Index which selects its constituents from a universe of global firms with market capitalizations above $30m that are listed on eligible exchanges in the US, Canada, or Hong Kong. Compared to rival medical cannabis ETFs, the underlying index captures companies not only in the US and Canada, but also those operating in Australia, Israel, China, Colombia, Switzerland, and the UK.
The methodology utilizes insights from New Frontier Data to select firms with exposure to the medical cannabis industry and classifies them according to one of four sectors: biotechnology/pharma, agriculture tech, hemp & CBD, and big pharma.
Companies are excluded if they are non-compliant with state and federal laws in the countries in which they operate or if they are directly involved in the production or distribution of cannabis for the recreational consumer market.
The weight of the big pharma sector in the index is set at 10% and constituents within this sector are equally weighted. The remaining weight (90%) is distributed amongst the constituents from the other three sectors according to average daily trading volume while capping individual stock weights at 15%.
The fund has an expense ratio of 0.65%.
It is listed on LSE in USD (FLWR LN) and GBP (FLWG LN) and on Xetra in EUR (BLUM GY).