Tech Megatrends ETF Report | April 2024

Tech Megatrends ETF Key Takeaways

  • ITEK at centre of Tech Convergence and AI – underweight FAANGS & Magnificent 7.
  • Fast adoption of OpenAI – ChatGPT and BARD AI – boosts Cloud usage and AI spend.
  • Equal weight across 8 subthemes (12.5% per theme; 120 total holdings, 15 per subtheme).
  • ITEK gained 1.7% in March.
  • Potentially well positioned for broader Tech rally in 2024.
  • Benefits as Global Digital convergence increases M&A deals. More deals likely in 2024 across MidCaps & SmallerCaps.
  • ITEK broader than GICS classification – includes EVs, Gaming/Streaming, Social Media (excluded by Tech Indices).
  • Robust US economy helps boost Tech earnings broadly – ITEK potentially well positioned beyond Megacaps.
  • Social Media, Cloud, AI, Cybersecurity, EVs, Robotics, Streaming all interlinked – boosting usage & deals.
  • For 2024, Digital Entertainment & Robotics/Automation (AI) have been our best subthemes, followed by, Cybersecurity, Cloud, and Blockchain.
  • In March, Social Media and Blockchain both rebounded, showing the strongest gains.
  • Best Subthemes in March: Blockchain 7.4%, Social Media 5.0%, AI (Robotics & Automation) 2.9% and Genomics 1.5%.
  • Far lower P/E ratio, Price/Book & Price/Sales versus Nasdaq.
  • Top holdings equal weight – far lower concentration risk than Nasdaq and most Tech funds in FAANGS.
  • Global mix: US 63.4%, China 11.6%, Japan 8.0%, Germany 4.1%, Canada 3.1% & Australia 3.5%.
  • Not 100% US centric – unlike 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 31/03/2024. 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

  • Likely Fed rate cuts in 2nd half – tailwind for disruptive Tech stock valuations.
  • Big AI spending boosting Big Tech values & Cloud providers.
  • Positive economic sentiment boosting Tech spending and deals.
  • Broader Tech rally beginning – enjoying positive rerating, beyond Magnificent 7.
  • AI Convergence across Tech: Cloud, Social Media, Gaming, Future Cars and Cybersecurity.
  • Majority of tech stocks remain below 2021 levels, undervalued versus Magnificent 7.
  • Over $2tn spending in AI expected within 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 and video streaming to mobile (expected to double in 3 years).
  • US Chips Act and $1tn Infrastructure Bill boosts EVs and onshoring IT trend.

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

Subtheme Returns – March

ContributionContribution (%)Average Return (%)Sum of Weight (%)Count*
Robotics & Automation0.40%2.85%14.61%16
Cyber Security-0.22%0.10%14.95%17
Future Cars-0.37%-3.51%11.29%17
Digital Entertainment0.01%-2.56%15.10%17
Cloud Computing0.01%0.42%14.56%17
Social Media0.55%4.96%12.68%16
March Return1.77%

*Count following rebalancing.

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

Largest Contributors – March

HOLDINGSIndex CategoryContribution (%)Return (%)Average Weight (%)
CLEANSPARK INCBlockchain1.56%92.29%2.02%
NVIDIA CORPRobotics & Automation0.65%82.46%1.11%
APPLOVIN CORPDigital Entertainment0.57%80.45%0.94%
LIFE360 INC-CDISocial Media0.43%73.15%0.81%
COINBASE GLOBAL INC -CLASS ABlockchain0.88%52.44%1.65%
SPOTIFY TECHNOLOGY SADigital Entertainment0.37%40.44%1.16%
GALAXY DIGITAL HOLDINGS LTDBlockchain0.49%40.08%1.67%
KONAMI GROUP CORPDigital Entertainment0.21%39.04%0.85%
META PLATFORMS INCSocial Media0.37%37.18%1.15%
TOYOTA INDUSTRIES CORP ORDRobotics & Automation0.24%36.09%1.02%
NEXTDC LTDCyber Security0.20%29.57%0.89%
SAP SECloud Computing0.23%29.38%0.98%
DRAFTKINGS INCDigital Entertainment0.28%28.82%1.06%
CROWDSTRIKE HOLDINGS INCCyber Security0.33%25.56%1.42%
NETFLIX INCDigital Entertainment0.22%24.74%1.00%
CIPHER MINING INCBlockchain0.26%24.70%0.88%
TRADE DESK INC/THE -CLASS ADigital Entertainment0.15%21.48%0.75%
CYBERARK SOFTWARECyber Security0.22%21.26%1.14%
CORTEVA INCGenomics0.15%20.35%0.81%
ORACLE CORPCloud Computing0.13%19.14%0.76%
INTUITIVE SURGICAL INCRobotics & Automation0.15%18.30%0.94%
MEDIATEKRobotics & Automation0.13%17.73%1.12%
MARVELL TECHNOLOGY INCRobotics & Automation0.13%17.53%0.92%
QUALCOMM INCRobotics & Automation0.17%17.06%1.04%
FORTINET INCCyber Security0.13%16.71%0.87%
NETEASE INCDigital Entertainment0.10%15.79%0.77%
OKTA INCCyber Security0.13%15.56%0.86%
SALESFORCE INCCloud Computing0.14%14.46%1.01%

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

Tech Megatrends ETF Performance
As of 31.03.2024

HAN-GINS Tech Megatrends Equal Weight UCITS ETF  1.72%2.21%22.72%2.21%22.76%-18.38%65.44%
Solactive Innovative Technologies Index (NTR)1.79%2.38%23.25%2.38%23.68%-17.60%69.03%

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 31/03/2024

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.