ROBO Global, the index provider behind the first robotics ETF, is providing the underlying benchmark for another ETF managed by Exchange Traded Concepts. The ROBO Global Healthcare Technology and Innovation ETF (HTEC) takes a forward-looking perspective on the health care space.
HTEC comes with an expense ratio of 0.68% after a fee waiver of 0.12% that will be in place through August 31, 2020. It lists on the NYSE Arca.
The $1.3 billion ROBO Global Robotics and Automation Index ETF (ROBO), also from Exchange Traded Concepts, launched in October 2013 and was the first ETF to specifically cover the robotics space.
“We’re not very prolific in the strategies we put out,” said ROBO Global CEO and Partner Travis Briggs in reference to HTEC. “You can rest assured that there was a lot of thought, consideration and work that went into this index. It’s research-driven. It’s 50% small- and midcap, and it’s very thoughtful in its approach to how we define this particular universe.”
He notes that the index aims to capture how technology is changing how health care is delivered, performed and received, and points out that health care has represented 10-15% of ROBO since that fund’s launch.
“We think health care is a space that’s going to explode with innovation over the next decade,” Briggs added.
The underlying index is drawn from an in-house proprietary global database that looks at technology and innovation in the health care space. Companies classified within the following categories are eligible for inclusion: diagnostic; lap process automation; regenerative medicine; precision medicine; data and analytics; telehealth; robotics; and medical instruments, the prospectus says.
The firms in the database are scored on a 1-100 scale based on their revenues and leadership in the space, with companies scoring higher than 50 eligible for inclusion. Ultimately, 50-100 companies are selected for the index and weighted based on their scores, according to the document.
HTEC currently has 85 components. Of those, Dexcom, Teladoc Health and Tabula Rasa Healthcare rank as its top three holdings, with weights between 1.59% and 1.62% within the index.
Medical diagnostics is the largest category, at 26% of the index, followed by diagnostics and precision medicine at 19% and 12%, respectively.
The U.S. dominates the index in terms of country weightings, at 82%, with Switzerland at 4% and the Netherlands at 3%.
Large caps represent 40% of the index, with midcaps and small caps representing the rest.
American Century Fee Cut
In other news, American Century has cut the fee on its American Century Diversified Corporate Bond (KORP) by more than a third. Effective June 14, the $63 million fund's expense ratio was reduced from 0.45% to 0.29%.
KORP is an actively managed ETF that invests in corporate debt denominated in U.S. dollars, with an eye to generating income.
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