Thematic ETF Trio Debuts

October 30, 2019

On Tuesday, Global X rolled out three ETFs with thematic focuses. The Global X Thematic Growth ETF (GXTG) is an ETF-of-ETFs that invests in other Global X thematic ETFs, while the Global X Cybersecurity ETF (BUG) and the Global X Video Games & Esports ETF (HERO) highlight popular themes.

The three funds all come with an expense ratio of 0.50% and list on the Nasdaq exchange.

GXTG’s underlying index seeks to invest in what the issuer terms “disruptive macro-trends.” It ranks the eligible components by realized sales growth; weights must fall between 7.5% and 25% of the index, according to the prospectus. Currently, the underlying index includes seven holdings in total, all of them Global X thematic ETFs. This is the first ETF that seeks to capture multiple themes in an ETF-of-ETFs structure.

BUG looks to target companies at the global level that are linked to the cybersecurity space that meet size and liquidity thresholds. The underlying index is a pure-play benchmark, requiring companies to derive at least half of their revenues from cybersecurity-related business activities. The index, which has 31 components,  is weighted by modified market capitalization and reconstituted twice a year, its prospectus says. Its primary competitor is the $1.4 billion ETFMG Prime Cyber Security ETF (HACK), which launched in 2014.

HERO’s underlying index focuses on companies likely to benefit from the increasing popularity of video games and esports, with its scope ranging from video game developers to league operators and owners. Companies must meet size and liquidity requirements and are weighted in the index based on modified market capitalization, with the index reconstituted twice a year. According to the ETF’s prospectus, the index currently includes 40 components. There are three other ETFs focused on video games or esports, with the largest being the $82 million ETFMG Video Game Tech ETF (GAMR), which launched in 2016.

Contact Heather Bell at [email protected]

 

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