ALPS Plans Disruptive Tech ETF
Latest fund to hit regulatory pipeline looking for companies with competitive edge.
ALPS ETF Trust is looking to launch an ETF that would offer exposure to so-called disruptive technologies.
The planned ETF detailed in a prospectus filed with regulators this month, the ALPS Disruptive Technologies ETF, will track the Indxx Disruptive Technologies Index.
The portfolio will consist of companies using disruptive technologies in “12 thematic areas: Healthcare Innovation, Internet of Things, Clean Energy, Smart Grid, Cloud Computing, Data and Analytics, Education, FinTech, Robotics and Artificial Intelligence, Cybersecurity, 3D Printing and Mobile Payments.”
Competitive Leg-Up
The idea is that the use of disruptive technology by these companies in these various segments of the market will give them an edge on their competitors, be it through innovative production or distribution.
The strategy will be global in scope. Other selection thresholds such as minimum market capitalization, daily liquidity and exposure to the specific theme were not specified in the filing. Fees and ticker were also not disclosed.
This ETF would join a small but growing group of funds looking at “disruptive technology” as a core strategy. No ETF issuer has taken this theme more to heart than ARK Invest, which offers five different funds slicing and dicing cutting-edge technology in various segments.
The biggest of these funds is the global equity ARK Innovation ETF (ARKK), with $183 million in total assets. ARK today manages more than $460 million in combined assets.
Another example is the nearly two-year-old SPDR FactSet Innovative Technology ETF (XITK), a fund focusing exclusively on disruptive U.S.-listed technology and electronic media companies.
These types of strategies have been delivering returns, particularly when compared to the S&P 500. In the last 12 months, ARKK has rallied nearly 70%, while the SPDR S&P 500 ETF Trust (SPY) is up only about a third that amount.
Chart courtesy of StockCharts.com
ALPS has 20 ETFs in the market today with some $14 billion in combined assets.
Contact Cinthia Murphy at [email protected]
