A pair of ETF products from HANetf are changing the indices they track, moving to an equal weighting across all stocks and including a negative ESG screen in both indices.
The negative ESG screen includes norms-based screening, controversial weapons screening and a simple fossil fuel sector screen.
Both are being renamed to reflect the move from a market cap weighting to the new methodology, with the HAN-GINS Cloud Technology UCITS ETF is becoming the HANS-GINS Cloud Technology Equal Weight UCITS ETF (LON:SKYY) and HAN-GINS Indxx Healthcare Innovation UCITS ETF becoming HAN-GINS Indxx Healthcare Megatrend Equal Weight UCITS ETF (LON:WELL, LON:WELP)
The new cloud index, the Solactive Cloud Technology Equal Weight Index, where top 10 holdings include Teradata Corp, Avaya Holdings, Hewlett Packard, Intel Corp, and Extreme Network, is designed to target forecasts of 22% annual increases in global cloud spending and fast-growing sectors such as telemedicine, HANetf said.
Around three-quarters of the index is US-based, and back-tested performance showed it achieved 56.88% returns last year.
Updating the index methodologies positions the funds to benefit from a broader range of stocks, with SKYY’s index tracking 75 constituents and include companies from the three major sub-themes of infrastructure as a service (IaaS), platform as a service (PaaS) and software as a service (SaaS), with the latter having the larger share of the portfolio, HANetf said.
WELL/WELP will track the Indxx Global NextGen Healthcare Index which focuses on megatrend sub-themes including genome sequencing, healthcare analytics, robotics, medical devices, biological engineering, neuroscience, telemedicine, healthcare trackers, nanotechnology and bioinformatics.
Changes to WELL/WELP will add the sub-theme megatrend of telemedicine, HANetf said, noting it has performed strongly during the pandemic as well as expanding healthcare analytics to include bioinformatics and adding information technology services and medical/nursing services as an industry, adding that sub-themes will be capped to avoid over-reliance.
The index changes will be effective as of 9 April 2021.