Frankfurt-based index provider Solactive writes that recent years have seen a surge of thematic investments popularity.
These strategies allocate assets into stocks or other investments based on specific business sectors or themes, intending to benefit from the materialization of trends, technological innovation, and advancements, the firm says. “Emerging technologies, for example, are increasingly becoming part of our daily lives, and, therefore, the demand for disruptive materials, such as metals, minerals and other elements, grow.”
Within this context, Solactive has announced that Global X ETFs has launched the Global X Disruptive Materials ETF (DMAT) tracking the Solactive Disruptive Materials Index. The selection of the companies utilises Solactive’s proprietary Natural Language Processing Engine ARTIS.
The product allows investors to diversify their portfolio in the thematic space as well as to be indirectly exposed to the commodities sector through companies that have business operations in the field of disruptive materials exploration, mining, production and refining. The ten disruptive materials categories are classified as carbon fiber & carbon materials, cobalt, copper, graphene & graphite, lithium, manganese, nickel, palladium & platinum, rare earth elements, and zinc.
To be considered for inclusion in the index, companies must be involved in the following activities:
i. Exploration and mining: Companies engaged in the mining of disruptive materials and providing related services, including exploration and mineral extraction projects.
ii. Production of disruptive materials: Companies active in the manufacturing, processing and trading of disruptive materials for primary usage and directly related products.
iii. Enhancements of disruptive materials: Companies that are refining, developing and smelting materials to extract and purify disruptive materials.
The firm writes that its proprietary Natural Language Processing Engine ARTIS is utilising advanced algorithms to parse high volumes of public documents evaluating companies’ exposure to the segments described above. Using keywords that describe the 10 different disruptive materials categories, ARTIS identifies companies that have or are expected to have significant exposure to the provision of products and/or services that contribute to each disruptive material category.
Timo Pfeiffer, Chief Markets Officer at Solactive, comments: “We are pleased that Global X ETFs shares an innovative spirit in the thematic space and has chosen to collaborate with us as their business partner for this ETF, which cocoons the potential to deliver added value to investors for years to come.”