State Street Debuts Niche ETF Trio

Today, State Street Global Advisors is rolling out three ETFs focused on different, mostly technology-related themes. The funds and their tickers are:

• SPDR Kensho Intelligent Structures ETF (XKII)
• SPDR Kensho Smart Mobility ETF (XKST)
• SPDR Kensho Future Security ETF (XKFS)

Each comes with an expense ratio of 0.45% and lists on the NYSE Arca.

All three track indexes of U.S.-listed companies that can be domiciled in emerging or developed markets. Eligible components must have at least $100 million in market capitalization and a three-month average daily traded value of at least $1 million.

Each index sorts components into two buckets, core and noncore, with the components within each category weighted equally. The core portion’s weighting in each portfolio is based on the number of components relative to the noncore part of the portfolio and can be overweighted by a factor of as much as 20% relative to the noncore portion. The indexes are reconstituted annually and rebalanced semiannually, according to the prospectus.

Fund Specifics

XKII’s underlying index comprises the components of the Kensho Smart Grids Index and Kensho Smart Buildings Index and included a total of 45 securities as of the end of November, according to the prospectus.

While the fund’s index targets companies that are driving innovations in intelligent infrastructure, the two benchmarks from which it pulls its components target companies that provide products and services related to power, water and transportation infrastructures or companies that offer products and services necessary to allow buildings to implement intelligent technology.

XKST’s index, on the other hand, is designed to capture the performance of companies that contribute to the growth of innovation in the smart transportation space.

The index had 37 securities at the end of November, all selected from the Kensho Autonomous Vehicles Index, the Kensho Advanced Transport Systems Index—which covers companies offering large-scale products and services for fleets, cargo transportation and mass transit—and the Kensho Drones Index. With regard to drone technology, the fund’s index only includes companies offering technology designed for civilian and commercial use.

Meanwhile, XKFS tracks an index with more securities than the other two funds, at 67 components. The wider index selects its holdings from the Kensho Cyber Security Index and the Kensho Smart Borders Index, as well as from the military components of the Kensho Robotics Index, the Kensho Drones Index, the Kensho Space Index, the Kensho Wearables Index and the Kensho Virtual Reality Index.

Essentially, the fund covers the issue of security technology ranging from the level of computers and individuals to that of outer space. 

Kensho describes itself as a data analytics and machine intelligence company and calculates a family of New Economies indexes designed to capture “21^st century sectors” and the companies driving the fourth Industrial Revolution.

Contact Heather Bell at [email protected]