Tech Megatrend ETF Report | March 2024

Tech Megatrends ETF Key Takeaways

  • ITEK globally well diversified – underweight FAANGS & Magnificent 7.
  • Equal weight across 8 subthemes (12.5% per theme; 120 total holdings, 15 per subtheme).
  • ITEK broader than GICS classification – includes EVs, Gaming/Streaming, Social Media (excluded by Tech Indices).
  • ITEK gained 8.7% in February.
  • Well positioned for broader Tech rally in 2024.
  • Benefits as Global Digital convergence increases – large M&A deals likely in 2024.
  • Social Media, Cloud, AI, Cybersecurity, EVs, Robotics, Streaming all interlinked – boosting usage & deals.
  • Best Subthemes in March: Blockchain 22.8%, Digital Entertainment 9.5% gain, Cybersecurity 8.9%, Robotics-Automation 8.4%, Future Cars 6.3% & Genomics 6.1%.
  • Far lower P/E ratio, Price/Book & Price/Sales – versus Nasdaq.
  • Top holdings equal weight – so far less concentrated than Nasdaq & most Tech funds in FAANGS.
  • Global mix: US 64.0%, China 11.5%, Japan 7.9%, Germany 4.1%, Canada 3.0% & Australia 3.5%.
  • Unlike almost 100% US centric Nasdaq & other Tech Indices/Funds.
  • Top 15 leaders for each Megatrend subtheme – all established firms.
  • Top 5 holdings less than 8% weight; Top 10 under 15%. Nasdaq approaches 37% & 52% respectively.
  • Mega-Cap weight under 7% (Nasdaq 49%).

Source of all data: Gins Global / Bloomberg as of 29/02/2024. Additional sources available upon request. Please note that all performance figures are showing net data. Past performance is not indicative of future performance and when you invest in ETFs, your capital is at risk.

Macro Outlook

  • Upcoming Fed rate cuts – tailwind for disruptive Tech stock valuations.
  • Broader Tech rally beginning – enjoying positive rerating, beyond Magnificent 7.
  • Big AI spending boosting Big Tech values & Cloud providers.
  • Convergence of Tech across, AI, Cloud, Social Media, Gaming and Cybersecurity.
  • Majority of tech stocks below 2021 levels, undervalued versus Magnificent 7.
  • Over $2tn spending in AI expected within the decade. Expect more M&A deals.
  • Low P/Es – attractive valuations. Quality Megatrend holdings amongst lowest P/Es in years.
  • Online Gaming dominated by Mobile – boosting Digital Entertainment/Videos (see chart).
  • Social Media boosted via gaming & video streaming to mobile (expected to double in 3yrs).
  • US Chips Act & $1tn Infrastructure Bill boosts EVs and onshoring IT trend.
  • Fast adoption of OpenAI – ChatGPT & BARD AI – boosts Cloud usage.
  • Blockchain rerating as tokenization ledger adoption to increase in financial services.

Source: Nova Advisor. For illustrative purposes only. Chart displays expected data.

Source of all data: Gins Global / Bloomberg as of 29/02/2024. Additional sources available upon request. Please note that all performance figures are showing net data. Past performance is not indicative of future performance and when you invest in ETFs, your capital is at risk.

Subtheme Returns – February

 

ContributionContribution (%)Average Return (%)Sum of Weight (%)Count*
Blockchain4.23%22.80%17.40%15
Robotics & Automation1.12%8.39%13.72%15
Genomics0.58%6.09%10.00%15
Cyber Security0.99%8.87%14.31%15
Future Cars0.62%6.31%8.99%15
Digital Entertainment1.08%9.51%12.98%14
Cloud Computing0.28%1.77%12.22%14
Social Media-0.06%0.98%10.38%14

  *Count following rebalancing.

Source of all data: Solactive. Past performance is no guarantee of future performance.

 

Largest Contributors – February

HOLDINGSIndex CategoryContribution (%)Return (%)Average Weight (%)
CLEANSPARK INCBlockchain1.47%107.70%2.36%
LI AUTO INC-CLASS AFuture Cars0.37%67.26%0.64%
COINBASE GLOBAL INC -CLASS ABlockchain0.79%58.78%1.58%
IRIS ENERGY LTDBlockchain0.34%50.51%0.96%
GALAXY DIGITAL HOLDINGS LTDBlockchain0.73%48.34%1.86%
MARATHON DIGITAL HOLDINGS INCBlockchain0.55%46.08%1.52%
APPLOVIN CORPDigital Entertainment0.36%45.20%0.96%
KUNLUN TECH CO LTD-ASocial Media0.25%36.11%0.77%
RANGE INTELLIGENTCyber Security0.20%30.43%0.68%
OKTA INCCyber Security0.25%29.82%0.82%
RIOT BLOCKCHAIN INCBlockchain0.24%29.54%1.01%
NVIDIA CORPRobotics & Automation0.30%28.58%1.16%
NEXTDC LTDCyber Security0.21%25.89%0.88%
META PLATFORMS INCSocial Media0.28%25.63%1.25%
BITFARMS LTD/CANADABlockchain0.33%25.08%1.72%
TRADE DESK INC/THE -CLASS ADigital Entertainment0.18%24.84%0.76%
HIVE BLOCKCHAIN TECHNOLOGIESBlockchain0.13%19.44%0.82%
SPOTIFY TECHNOLOGY SADigital Entertainment0.22%19.07%1.24%
VENUSTECH GROUP INC-ACyber Security0.10%19.01%0.57%
NXP SEMICONDUCTOR NVFuture Cars0.16%18.60%0.89%
LEGEND BIOTECH CORPGenomics0.12%18.34%0.69%
TOYOTA INDUSTRIES CORP ORDRobotics & Automation0.16%18.32%1.06%
MEDIATEKRobotics & Automation0.20%18.01%1.13%
CORTEVA INCGenomics0.13%17.68%0.84%
BEIGENE LTDGenomics0.10%17.06%0.57%
NETEASE INCDigital Entertainment0.13%16.30%0.81%
SANGFOR TECHNOLOGIES INC-ACyber Security0.07%16.10%0.43%
HUT 8 MINING CORPBlockchain0.07%14.83%0.55%
JIANGSU HENGRUI MEDICINE CO LTD CLASS AGenomics0.10%13.86%0.79%
CYBERARK SOFTWARECyber Security0.15%12.97%1.21%
SHENZHEN INOVANCE TECHNOLOGY CO LTDRobotics & Automation0.09%12.96%0.71%
VERALTO CORPGenomics0.01%12.69%0.08%
WEIBO CORPSocial Media0.07%12.59%0.55%
ROCKWELL AUTOMATION INCRobotics & Automation0.09%12.56%0.70%
TERAWULF INCBlockchain0.08%12.28%0.79%
HELLO GROUP INCSocial Media0.07%12.27%0.58%
MEITU INCSocial Media0.07%11.21%0.64%
DRAFTKINGS INCDigital Entertainment0.12%10.93%1.13%
BYD CO LTDFuture Cars0.06%10.90%0.59%
CROWDSTRIKE HOLDINGS INCCyber Security0.16%10.82%1.54%
NORTHERN DATA AGBlockchain0.14%10.54%1.30%
KONAMI GROUP CORPDigital Entertainment0.07%10.45%0.87%

Source of all data: Solactive. Past performance is no guarantee of future performance.

Tech Megatrends ETF Performance
As of 29.02.2024

1M3M6MYTD12M3YSI
HAN-GINS Tech Megatrends Equal Weight UCITS ETF  8.71%12.69%12.60%0.48%29.29%-20.88%62.64%
Solactive Innovative Technologies Index (NTR)8.85%12.88%13.05%0.58%30.44%-20.14%66.07%

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 29/02/2024

Performance before inception is based on back tested data. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. When you invest in ETFs and ETCs, your capital is at risk.