Yuanta launches ‘future communications’ ETF in Taiwan

Nov 12th, 2019 | By | Category: Equities

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Taipei-based investment manager Yuanta Securities has launched a new ETF in Taiwan providing exposure to a globally diversified portfolio of companies driving change in communications technologies and services.

Yuanta Global future communications etf

The fund provides exposure to companies that are driving change in communications technologies and services.

The Yuanta Global Future Telecommunications ETF (00861 TT) has listed on the Taiwan Stock Exchange and comes with an expense ratio of 1.13%.

The fund is linked to the ICE FactSet Global NextGen Communications Index which targets relevant companies from a universe of common stocks and American Depository Receipts (ADRs) listed primarily on developed market stock exchanges.

To be eligible for inclusion, stocks must have a minimum market capitalization of $500 million and a three-month average daily trading value of at least $2m.

The index uses FactSet’s Revere Business Industry Classification System (RBICS) to identify firms that derive at least 50% of their revenue from one of 30 industry groups related to the theme of next-generation communications technologies and services.

The methodology aims to capture firms involved across the value chain of future communications including providers of wireless communications equipment, manufacturers of smartphones, suppliers of infrastructure such as real estate, and providers of wireless services.

The list of 30 industries is further broken down into two communications value chain categories: communication equipment & infrastructure services (category one) and communication telco providers (category two).

The index selects the largest 40 companies from category one and the largest ten companies from category two. Category one receives a weight of 80% and category two a weight of 20%. Within each category, stocks are weighted by float-adjusted market capitalization subject to an individual cap of 8%.

Reconstitution occurs annually, while the index is rebalanced on a semi-annual basis.

Earlier this year, Yuanta partnered with index provider FTSE Russell to launch the first ETF in Taiwan to explicitly incorporate environmental, social, and governance (ESG) selection criteria: the Yuanta FTSE4Good TIP Taiwan ESG ETF (00850 TT) based on the FTSE4Good TIP Taiwan ESG Index.

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