Industry Updates

Ark lists Israeli disruptive tech ETF

David Tuckwell

Today's ETF listings from around the world


ARK lists Israeli tech ETF

Israeli tech companies are renowned for their inventiveness. But they've always been a bit trickier for ETFs. Israel doesn't have ETFs - it has index linked certificates, which are similar but different - and a lot of the material on the Israeli stock market is only available in Hebrew.

But buying into disruptive Israeli tech is about to get easier thanks to a new US listing, the ARK Israel Innovative Technology ETF (IZRL). ARK is the US-based investment manager that got the press rolling in 2016 when it listed the 3D printing ETF.

IZRL will invest in Israeli companies "whose main business operations are causing disruptive innovation in the areas of genomics, health care, biotechnology, industrials, manufacturing, the Internet or information technology," the prospectus says. It will tilt heavily towards IT, which will receive 56% weighting. The index IZRL tracks will be put together by Solactive. It will invest in 46 companies and rebalance quarterly.

Innovator ETF gives up on active management

The $208m Innovator IBD 50 Fund (FFTY) has given up on active management and transformed into a purely passive ETF.

Before 15 November FFTY was something of an unusual hybrid, using both an index and active management within an ETF. FFTY's active management tended to hug the benchmark index anyway.

Going forward FFTY will be purely passive and track the IBD 50 Index, which tracks US stocks and picks companies based on growth.

FFTY will score companies based on 11 factors, they are: earnings per share; relative price strength; sales margin return on equity; accumulation distribution; industry group relative strength; growth in earnings; annual growth rate; sales growth; acceleration in sales; liquidity; annual return on equity.

It then puts the top 50 scoring companies in the index, weighted in tiers. The top 10 stocks get a 3.5% weighting; the second 10 get 3%; the third 10 get 2%; the forth 10 get 1%; and the last 10 get 0.5%.

Interestingly, the index also has as hedging function that responds to "the overall health of the equities market". If the market gets too unhealthy, FFTY invests 50% in cash and halves the equity exposure weightings. It will only switch back when the market is healthy again. FFTY's index is rebalanced weekly and its TER is 0.80%.


Samsung lists total return version Kospi 200 ETF

Korean chaebol Samsung is listing a plain vanilla ETF under its Kodex brand, the Samsung Kodex 200 Total Return ETF (278530) tracks the Kospi 200 TR index. Kodex already has a suite of products that track the Kospi 200, including Kodex 200 (069500), perhaps the biggest ETF by assets in Korea with 6.1tr KRW under management (roughly US$5.6bn). What's new about today's listing is that it tracks a total return index, a Kospi version of which was not available until December 2016.

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