BlackRock has announced the launch of four thematic iShares exchange traded funds (ETFs).
The four new funds aim to cover investment opportunities created by the global trends towards ageing population, healthcare innovation, robotics and automation, and digitalisation, the company said in a statement announcing the launch.
BlackRock has created the funds via a collaboration with iSTOXX and FactSet to launch the thematic indices. They are rules-based, systematic strategy indices built using proprietary databases. The underlying index for each fund employs a revenue-focused methodology to ensure the most relevant companies for a given theme are consistently maintained. To avoid concentration risk, each index has a minimum of 80 constituents, BlackRock said.
Tom Fekete, head of product for iShares EMEA at BlackRock, said that mega-trends are affecting the way many people live and work and that he believes that these new ETFs will be able to capture the “opportunities created by long-term structural trends”, by identifying the companies most aligned to them.
“They are a new set of tools that investors can use to express their views on these trends, in a transparent, global and cost-efficient way,” he said.
Matteo Andreetto, chief executive at STOXX, said: “Research shows that the disruptive mega-trends captured by the iSTOXX FactSet Thematic indices will play a major role in the transition towards a digital, highly technological world that seeks to find alternatives to current healthcare approaches and effective solutions related to an increasing life expectancy.
Jeremy Zhou, head of indexing at FactSet added that by identifying specific theme-related industries in a “systematic and precise manner” has always been a challenge but by leveraging the FactSet Revere Business Industry Classification System, he believes that they have a solution for delivering “such precision into the thematic portfolio construction process”.
The funds are physically-replicating, meaning they buy the securities of the index, and each has a total expense ratio of 0.40%.
The new iShares thematic ETFs
|Fund||Index exposure||Did you know?|
|iShares Ageing Population UCITS ETF (AGED)||Companies positioned to benefit from the growing needs of an older global population. Sectors range from health insurance and pharmaceuticals to financials, aged-care and consumer services.||By 2030, it is expected that 13% of the population will be 65+ representing 1 billion people.|
|iShares Healthcare Innovation UCITS ETF (HEAL)||Companies focused on advancing specific aspects of the healthcare industry, including drug treatments, patient care or diagnostic tools.||The healthcare market is projected to be worth $10.3trn by 2020 versus $7.2trn in 2013.|
|iShares Automation & Robotics UCITS ETF (RBOT)||Companies which are innovating across technologies, including manufacturing robotics and wearable technology.||Up to 45% of current global work activities could be automated using existing technology.|
|iShares Digitalisation UCITS ETF (DGTL)||Companies primarily focusing on cybersecurity, electronic payment processes and financial technology.||Investments in financial technology have grown exponentially, rising from $1.8 billion in 2010 to $19 billion in 2015.|
Table submitted by BlackRock.