Qontigo has licensed the STOXX Global Digital Entertainment and Education Index to BlackRock as an underlying benchmark for an iShares ETF.
The STOXX Global Digital Entertainment and Education Index selects companies that generate more than half of their revenues from 34 sectors associated with the targeted theme, including Educational Software, General Gaming Products and Services, Content Platforms, and Electronic Devices. The index, which uses an ‘adjusted’ equal-weighted scheme, applies liquidity and market-capitalization filters to the selection of stocks. The methodology also implements exclusionary ESG screens.
“Thematic indices offer a rules-based, systematic and transparent way to target megatrends that are having an impact on our world,” says Hamish Seegopaul, Managing Director, Product R&D at Qontigo. “The transition to online and technology-focused learning and entertainment was already gathering momentum before COVID-19 and has only accelerated since then. Both activities are bringing about a paradigm shift that is, for investors, best captured through a thematic strategy.”
Evy Hambro, Global Head of Thematic and Sector Investing at BlackRock says: “Thematic investing is being used by an increasingly diverse investor base who are seeking exposure to the secular, disruptive and long-term trends that are set to define the future of the global economy. As technology continues to revolutionise the entertainment industry and demand for digital experiences changes the way people play and learn, we have worked with Qontigo to design the iShares Digital Entertainment & Education UCITS ETF, providing investors with granular exposure to one area of the global economy that is evolving rapidly. This addition to our Thematics range leverages the strength of our global investment platform to capture drivers of structural change and to position investors’ portfolios for long-term growth.”
“This year’s increased market volatility and big macro shifts, and the unequal performance across sectors, have highlighted the benefits of more focused strategies such as thematic investing,” says Christoph Schon, Senior Principal, Applied Research at Qontigo. “These strategies offer the advantage of crossing the established boundaries of conventional region-, country- or sector-based offerings. As such, they can capitalize on powerful, structural drivers that provide less cyclicality and more diversification to the usual market dynamics.”
Qontigo and BlackRock’s thematic collaboration started in 2016 and now includes eight ETFs covering themes such as Automation & Robotics, Healthcare Innovation, Digitalisation and Ageing Population. The funds track STOXX indices and have over USD 8.8 billion in assets.