Self-driving car ETF; Legg Mason teams with BetaShares

by , 9th February 2018

Today’s new ETF listings from around the world. 

USA

New electric and self-driving cars ETF

Penserra capital and white labeller exchange traded concept are banding together to list a new self-driving cars ETF. The Innovation Shares NextGen Vehicles & Technology ETF (EKAR) will track companies with “business involvement” in the new wave of car manufacturing. This involvement includes those developing cars with electric motors and rechargeable battery packs and self-driving cars. It also includes business simply using those cars, the prospectus says.

EKARS uses a keyword search on companies’ material on companies’ websites and databases to determine if they are sufficiently involved in developing or using new car technology. Companies that are “strongly tied” to new car tech are then grouped into four “Stakeholder” categories:

(1) “Battery Producers:” companies that mine for metals (such as lithium or cobalt) used in the production of batteries, manufacture of materials and specialty chemicals and components used in batteries, and production of battery cells;

(2) “Original Equipment Manufacturers:” companies that design, manufacture and/or distribute new car tech;

(3) “Suppliers:” companies that produce or distribute parts and components used in Next Generation Vehicles;

(4) “Semis and Software:” companies that produce semiconductors used in new cars and those that produce software for them.

A maximum of 25 companies is taken within each tier, with each company’s weighting capped at 7% with no tier taking more than 40%.

Analysis – cars yes, batteries no

Self-driving cars are a promising new technology. In theory, they’ll lower road casualties as machines tend to be safer drivers than humans. They also have the potential to allow relaxation of blood alcohol laws, to the delight of sports fans and late-night revellers. But at this stage, some of the tech still needs ironing out as self-drivers struggle with winter conditions like snow and low lighting. No-one really knows how long it will take to put the finishing touches on them. ETFs – there are more than one of them now – like EKAR that track this new area offer a promising type of thematic beta.

Battery tech is more difficult. Plenty of investors have been burnt the past decade trying to pick what battery tech will power the next generation of cars. Governments globally are pouring money into the field. Yet lithium ion batteries remain king, despite being introduced by Sony more than 25 years ago. If anyone knows how to pick battery tech it’s a well-kept secret.

Australia

BetaShares lists new actively managed funds with Legg Mason

Aussie ETF issuer BetaShares is teaming up with global asset manager Legg Mason to list two ETMFs. They are:

  • BetaShares Legg Mason Equity Income Fund (EINC)
  • BetaShares Legg Mason Real Income Fund (RINC)

From what information is available at this early stage, both funds look more like traditionally managed funds than benchmark tracking ETFs. Neither fund spells out an investment strategy per se. Bloomberg information only says “S&P/ASX 200 Index by investing in a portfolio of listed Australian real assets and to grow this income above the rate of inflation.” Legg Mason uses similar language and product descriptions on its other Australian funds. This will be updated as more information becomes available.

Korea

ETNs from Samsung

With CEO fresh out of jail, Korean chaebol Samsung is adding to its raft of ETNs. They are:

  • Samsung Securities Samsung KQ150 Call 1903-01 ETN 46 (530046)
  • Samsung Securities Samsung KQ150 Call 1903-02 ETN 47 (530047)

Nonghyup Bank rolls out call and put options ETNs

NH QV is also listing ETNs in Seoul this week. They are:

  • NH QV K200 Call 1904-01 ETN 48 (550048)
  • NH QV K200 Call 1904-02 ETN 49 (550049)
  • NH QV K200 Put 1904-01 ETN 50 (550050)
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