DWS and Nasdaq are on the hunt for a new data provider for two thematic ETFs after their existing partner Yewno Inc. was forced to liquidate the entirety of it assets.
In a shareholder notice, the group said the £450m Xtrackers Artificial Intelligence & Big Data UCITS ETF (XAIX) and the £77m Xtrackers Future Mobility UCITS ETF (XMOV), which track Nasdaq Yewno indices of the same name, will need to find a new data provider before their next rebalance on 21 July.
“DWS is exploring the best options available to ensure that the funds will continue to reflect the performance of shares of companies from global developed and emerging markets that have material exposure to the respective themes which meet certain ESG criteria,” the asset manager said.
“This includes consulting with Nasdaq to determine what options are available to find an alternative provider of the thematic data.”
Nasdaq, which will continue as the index administrator for the two indices, partnered with Yewno Inc. to provide the proprietary theme and sub-theme classifications used for reviewing exposure to innovative technologies.
The data was then used to construct each reference index for the two ETFs which launched in January 2019.
However, last September Yewno Inc. filed for a ‘general assignment’, a process that enables it to liquidate all its assets without filing for bankruptcy, after it said it was unable to pay its debts in full.
Despite this, DWS said Nasdaq was able to work with the assignee of Yewno Inc.’s assets, Yewno LLC, and former Yewno Inc. employees to ensure the semi-annual rebalance was able to take place on 20 January.
The two indices track stocks from large, mid and small-cap stocks from across the investment universe with individual securities capped at 4.5%.
Securities were selected using Yewno’s pure and contribution score method, assigning companies two scores based on their patent filing activity to assess how “intensely a company engaged in a theme”.
The German asset manager added the liquidation of Yewno Inc. assets “has no impact on the management or operation of the funds”.