ETF Securities launches three disruptive technology thematic ETFs

Jan 23rd, 2018 | By | Category: Equities

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ETF Securities has expanded its thematic offering with the launch of three global equity ETFs providing targeted exposure to disruptive technologies in the healthcare, energy storage and commerce industries.

ETF Securities launches three thematic technology ETFs

Howie Li, Co-Head of Canvas, ETF Securities.

The ETFs have been listed on the London Stock Exchange and are part of the issuer’s ‘Future Present’ line-up, which also includes the $1bn AUM ROBO Global Robotics and Automation GO UCITS ETF (ROBO LN) and $380m ETFS ISE Cyber Security GO UCITS ETF (ISPY LN).

Howie Li, CEO of Canvas, ETF Securities’ UCITS platform, commented, “These new additions to our technology range address exciting facets of changes in healthcare, energy storage and commerce.”


The ETFS Pharma Breakthrough GO UCITS ETF (BIOT LN) offers exposure to companies that are actively engaged in the research, development and/or manufacturing of orphan drugs. The fund is linked to the Solactive Pharma Breakthrough Value Index.

An orphan drug is a pharmaceutical product that has been developed specifically to treat rare diseases or disorders. Rare diseases typically offer small markets and low participation rates in clinical trials, meaning lower revenue potential. However, ETF Securities points to favourable regulation in Europe and the US and a strong compound annual growth rate of 9.4% for orphan drug revenues from 2011 to 2016 as bullish points for investing in this industry.

“Breakthroughs in biotech are also on the rise thanks to greater government incentives to focus on the development of solutions that help combat rare diseases,” said Li.

There are 29 constituents to the index, all of which operate in the healthcare sector. The US dominates country exposure with a 44.4% weight, followed by Japan (7.1%) and Ireland (6.9%). The largest constituent is US biotech firm Spectrum Pharmaceuticals (6.0%), which has seen its share price more than double over the past six months due to a robust pipeline of cancer-related drugs that are entering final testing phase.

The sterling share class trades under the ticker BIGT LN.

Energy storage

The ETFS Battery Value-Chain GO UCITS ETF (BATT LN) provides investors with the opportunity to participate in the growth of companies that supply certain electro-chemical energy storage technologies and as well as mining companies that produce metals used to manufacture batteries. The fund tracks the Solactive Battery Value-Chain Index.

The world has seen significant innovations in the energy storage space over the past year including in a wider range of applications such as electric vehicles, hybrids, and consumer electronics to digital backup and distributed storage.

ETF Securities quotes BBC Research which shows that the global market for advanced battery and fuel-cell materials reached $22.7 billion in 2016 and is expected to reach $32.8bn by 2022. Additional findings from Zion Research predicts that the lithium-ion battery sub-segment is expected to grow at a compound annual growth rate of 13.7% from 2017 to 2022.

According to Li, stricter emission regulations and grid storage mandates have created opportunities for companies operating in the battery value-chain. “Innovative energy storage is revolutionising how we live and work, and we believe that our battery product will provide exposure to a range of potentially high-growth, high-value companies exposed to this fast-changing industry.”

The underlying index is relatively concentrated with 27 constituents. Japanese stocks make up just under half (45.7%) the total index weight with the next largest country exposures being the US (17.3%), Korea (10.7%) and Germany (7.4%).

Unsurprisingly, industrials (36.9%) and materials (30.2%) make up the two largest sector exposures, followed by consumer discretionary (21.9%) and information technology (7.4%). The largest constituent is currently Orocobre (4.5%), an Aussie mining firm focused on lithium and borax mining operations within Argentina.

The fund is denominated in USD but a GBP share class is also available to trade under the ticker BATG LN.

E-commerce logistics

The ETFS Ecommerce Logistics GO UCITS ETF (ECOM LN) offers access to the performance of logistics service providers and technology companies who are engaged in e-commerce. The fund tracks the Solactive Ecommerce Logistics Index, an index tracking a basket of companies benefiting from the digitisation of commerce and the automation of the logistical supply-chain.

ETF Securities highlights research from TI Insight which shows that the global e-commerce logistics market is projected to grow at a compound annual growth rate of 15.6% from 2016 to 2020, leading to a total projected market value of €314bn.

The underlying index’s largest country exposures are to the US (38.5%), Japan (17.8%), Switzerland (7.1%) and Germany (6.9%). Industrials account for two-thirds of the total index weight, while information technology is the second largest exposure with 17.6%. Online food retailer Ocado is the largest constituent at 4.9%.

Its sterling share class trades under the ticker ECOG LN.

Listings and fees

Each fund is physically replicated and comes with a total expense ratio (TER) of 0.75%. In addition to the LSE listing, they are expected to cross-list on Deutsche Börse, Borsa Italiana, and NYSE Euronext in due course.

It is understood that all of these products will transfer to LGIM (Legal & General Investment Management) following its acquisition of Canvas, expected to be completed in Q1 2018.

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