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ETF Securities adds three ETFs to its Future Present technology range


ETF provider ETF Securities has launched three ETFs designed to capture exposure to three unique and evolving technology opportunities.

The ETFS Battery Value-Chain GO UCITS ETF gives investors the opportunity to participate in the growth of companies along the battery value-chain at a time where there is momentum in R&D and production of electric vehicles (EVs).

The ETFS Ecommerce Logistics GO UCITS ETF offers exposure to companies benefiting from the digitisation of commerce (e-commerce and m-commerce) and the automation of the logistical supply-chain.

The ETFS Pharma Breakthrough GO UCITS ETF offers exposure to companies developing treatments for rare diseases. The company says that all three complement ETF Securities’ existing range of Future Present ETFs.

Howie Li (pictured), CEO of CANVAS, ETF Securities’ UCITS platform says: “These new additions to our technology range address exciting facets of changes in healthcare, energy storage and commerce.

“Innovative energy storage is revolutionising how we live and work, and we believe that the battery product will provide exposure to a range of potentially high-growth, high-value companies exposed to this fast-changing industry. The ETFS Ecommerce GO UCITS ETF aims to deliver exposure to Ecommerce firms as the connection with retail consumers is transformed.  And breakthroughs in biotech are also on the rise thanks to greater government incentives to focus on the development of solutions that help combat rare diseases.

“We expect the new range of ETFs to be attractive to investors that are looking for potential growth opportunities that capture the progress being made in these emerging industries.”

The rationale behind the launch of the ETFS Battery Value-Chain GO UCITS ETF is that innovative energy storage is changing the world, from applications like electric vehicles (EVs), hybrids, and consumer electronics to stationaries like backup and distributed storage. ETFS says that strict emission regulation and grid storage mandates have created opportunities for companies in the battery value-chain. The global market for advanced battery and fuel cell materials reached USD22.7 billion in 2016 and is expected to reach USD32.8 billion by 2022 (Source: BCC Research 2016). The lithium-ion battery sub-segment is expected to grow at the highest compound annual growth rate (CAGR) of 13.7 per cent from 2017 to 2022 (Source: Zion Research 2017).
The ETFS Battery Value-Chain GO UCITS ETF is designed to track the Solactive Battery Value-Chain Index. The Index aims to track the performance of companies that are providers of certain electro-chemical energy storage technologies and mining companies that produce metals used to manufacture batteries.

ETFS Pharma Breakthrough GO UCITS ETF rationale is based on an “orphan drug”, a pharmaceutical product that has been developed specifically to treat rare diseases or disorders. Pharmaceutical companies often deprioritise orphan drugs. Rare diseases typically offer small markets and low participation rates in clinical trials, meaning lower revenue potential. However, regulation in Europe and the US has been favourable, ETFS writes. Orphan drug revenues grew at a 9.4 per cent CAGR from 2011 to 2016, and are expected to grow at a 11.0 per cent CAGR from 2017 to 2022 (Source: EvaluatePharma 2017).

The ETFS Pharma Breakthrough GO UCITS ETF is designed to track the Solactive Pharma Breakthrough Value Index. The Index aims to track the performance of companies that actively engaged in the R&D and/or manufacturing of orphan drugs.

The rationale behind the ETFS Ecommerce Logistics GO UCITS ETF is that the global eCommerce logistics market was valued at EUR176 billion in 2016, which is an increase of +18.1 per cent compared to 2015 (Source: TI Insight 2017). The global eCommerce logistics market is projected to grow at a CAGR of 15.6 per cent from 2016 to 2020 (Source: TI Insight 2017). The global eCommerce logistics market is projected to be valued at EUR314 billion by 2020 (Source: TI Insight 2017).

The ETFS Ecommerce Logistics GO UCITS ETF is designed to track the Solactive Ecommerce Logistics Index. The Index aims to track the performance of logistics service providers and technology companies who are engaged in eCommerce.

All products will transfer to LGIM (Legal & General Investment Management) with the completion of its acquisition of Canvas, ETF Securities‘ UCITS platform in Q1 2018.
ETF Securities launched its Future Present range in October 2014 with the inception of the ROBO Global Robotics and Automation GO UCITS ETF (ROBO), which has now gathered assets in excess of USD1 billion. The range also consists of the ETFS ISE Cyber Security GO UCITS ETF (ISPY), which was launched in October 2015 and now sits at USD378 million in assets.

In 2017, ROBO delivered performance of +46.7 per cent vs +21.7 per cent for the MSCI All-Country World IMI. Meanwhile, ISPY returned +24.2 per cent for the year.
The three new products will initially be listed on the London Stock Exchange, with listings on Deutsche Börse, Borsa Italiana, and NYSE Euronext to follow.

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