GinsGlobal has shifted its cloud technology and healthcare innovation ETFs from market-cap to equal weighted and added ESG screens, ETF Stream can reveal.
Effective 9 April, the HAN-GINS Cloud Technology UCITS ETF (SKYY) and HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL) will mark their index changes by being renamed the HANS-GINS Cloud Technology Equal Weight UCITS ETF (SKYY) and the HAN-GINS Indxx Healthcare Megatrend Equal Weight UCITS ETF (WELL), respectively.
The index changes have been announced as part of an effort to better-position SKYY and WELL to capture growth in the growing cloud computing and health innovation themes.
SKYY is expected to track 75 constituents, with allocations in sub-themes including Infrastructure as a Service, Platform as a Service, and Software as a Service with the latter expected to have predominance in the new portfolio.
The ETF will track the Solactive Cloud Technology Equal Weight index. Three-quarters of the benchmark is US-based and includes companies such as Teradata Corp, Avaya Holdings, Hewlett Packard, Intel Corp, and Extreme Network.
Meanwhile, WELL’s reindexing will see it track the Indxx Global NextGen Healthcare index, which covers genome sequencing, healthcare analytics, robotics, medical devices, biological engineering, neuroscience, telemedicine, healthcare trackers, nanotechnology and bioinformatics.
The ETF will be 78% weighted towards US-based companies and include companies such as GW Pharmaceuticals, Cellink AB, Myriad Genetics, Inovalon Holdings, and Alector Inc.
However, switching to an equal weight methodology will mean smaller, innovative firms contribute more significantly to the ETF’s performance.
Both SKYY and WELL will feature a negative ESG screen, which includes norms-based screening, and a screen for controversial weapons and fossil fuels.
Having benefitted from the popularity of tech and health thematics in 2020, the long-term outlook for both strategies remains positive. Spending on cloud technology is expected to reach $500bn within the next two years, while healthcare breakthroughs such as telemedicine are set to grow at 30% per annum until 2025.
Anthony Ginsberg, co-creator of SKYY and WELL, commented: “The switch to the digital world for work and leisure is likely to continue and will require continuing expansion of computational power while demand for innovative healthcare solutions will keep growing boosting companies in the sector.
“Changing the index methodology to expand the constituent base and add sub-themes which have grown in importance means both funds can ensure investors are positioned to benefit from newly emerging trends with high growth rates which the switch to equal weighting underpins.
“Incorporating basis ESG screens ensures we are aligned with what investors expect.”
Hector McNeil, co-founder and co-CEO at HANetf, added: “Over the last few years, the World has changed dramatically and expedited many megatrends, especially in technology and healthcare.
“There has also been a march for ESG principles to become more mainstream in asset management.”
The decision to switch SKYY and WELL to equally weighted methodologies brings them in line with the allocation strategy for the HAN-GINS Tech Megatrend Equal Weight UCITS ETF (ITEK) which was the first equal weighted ETF in the HAN-Gins range.
ITEK also reindexed to include 11 new blockchain holdings. Previously, the ETF had just two blockchain picks. Now, blockchain makes up one of the eight megatrends being tracked by ITEK, and constitutes 13% of the ETF’s basket.