Global X is relentlessly launching thematic ETFs. After bringing products like Global X Millennials Thematic ETF (MILN), Global X Health & Wellness Thematic ETF (BFIT), Global X Longevity Thematic ETF (LNGR) and Global X S&P 500 Catholic Values ETF (CATH) to the market, the issuer recently launched three technology-driven ETFs under the area of thematic investing. All three funds charge 68 bps in fees (read: Thematic ETFs: Smarter Than Regular Smart Beta ETFs?).
The funds provide good opportunities for investors to play the niche areas of the broader technology sector where there is both hype and promise, making these segments lucrative bets (see all technology ETFs here).
Below we highlight these ETFs in detail:
Inside the Newly Launched ETFs
FinTech Thematic ETF (NS:FINX)
The fundlooks to track companies belonging to the emerging financial technology sector, which takes into account a range of initiatives deployed to convert industries like “insurance, investing, fundraising, and third-party lending through unique mobile and digital solutions.”
The top three holdings are First Data (6.38%), Wirecard (5.95%) and SS&C Technologies (5.87%). The 29-stock fund puts about 42% weight in the data processing & outsourced services while application software (35.13%) and internet software & services (7.3%) round out the next two spots. U.S. has about 68% exposure to the fund followed by Germany (7.78%) and Switzerland (7.18%).
Competition: The fundwill face steepest competition from Purefunds Solactive Fintech ETF FINQ which operates exactly on the same theme and hit the market just a few days ago (read: New ETF That Promises Technological & Financial Bliss).
Internet of Things Thematic ETF (SI:SNSR)
The fundlooks to capitalize on companies that are beneficiaries of the implementation of the Internet of Things (IoT), as per the issuer. The issuer noted that the segment considers “the development and manufacturing of semiconductors and sensors, integrated products and solutions, and applications serving smart grids, smart homes, connected cars, and the industrial internet.”
Stmicroelectronics NV (6.38%), Dexcom Inc (6.35%) and Garmin Ltd (NASDAQ:GRMN) (6.07%) hold the first three spots of the 45-stock fund. As far as the industrial exposure is concerned, semiconductors take the top spot with 34.72% focus, followed by electrical components & equipment (15.4%) and communications equipment (9.95%). U.S. takes the top spot with about 52.4% weight while the Netherlands (19%) and Switzerland (8.26%) take the next two positions.
Competition: Thoughfunds based onInternet of Things (IoT) are yet to flood the technology ETF space, the fund will face competition from internet ETFs including First Trust Dow Jones Internet ETF (FDN) and PowerShares NASDAQ Internet ETF (PNQI). Also, with semiconductors accounting for a major share of the fund, SNSR will face threats from semiconductor ETFs like PowerShares Dynamic Semiconductors ETF (TO:PSI) (read: Profit from the Semiconductor Rally with These ETFs).
Robotics & Artificial Intelligence Thematic ETF BOTZ
The 28-stock fund looks to follow companies that are into the increased application of robotics and artificial intelligence (AI). SMC Corp (8.34%), ABB Ltd-Reg (8.21%) and Mitsubishi Electric Corp (7.61%) are the top three holdings of the fund.
Industrial Machinery takes up the first spot with about 30% exposure followed by Electronic Equipment & Instruments (11.6%) and Health Care Equipment (11.24%). Geographically, Japan takes the top spot with about 46% weight while the U.S. (20.36%) and Switzerland (10.48%) also get a double-digit allocation each.
Competition: Robo Global Robotics&Automation ETF (NASDAQ:ROBO) is to pose peer pressure to the newly launched BOTZ. Though there are plenty of technology ETFs available in the market, the Robotics segment is quite unexploited. This fact offers great scope to BOTZ to garner investors’ assets.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
PWRSH-DYN SEMI (PSI): ETF Research Reports
PF-SOLACTIVE FT (FINQ): ETF Research Reports
ROBO GR&AI (ROBO): ETF Research Reports
Original post
Zacks Investment Research