Horizons ETFs release BBIG ETF – Tracks Solactive Index Featuring the Battery, Biotech, Internet, and Gaming Industry
Timo Pfeiffer, Chief Markets Officer at Solactive
Thematic investing is a way to focalize asset allocation upon specific business sectors or themes. Its goal is to benefit from economic trends and advancements in technological innovation. Horizons ETFs now release an ETF pooling the largest companies of four of the most thriving industrial sectors – the battery, biotech, internet, and gaming industry – into one fund, the Horizons Global BBIG Technology ETF. The ETF tracks the Solactive Global BBIG Index.
Technology innovation helps to solve society’s biggest concerns, and the global pandemic is one of the latest examples where new issues turn the spotlight towards particular industrial sectors, potentially catalyzing their long-term success. Studies say that, from 2021 to 2028, the biotech sector is expected to expand at a CAGR of 15.83%, culminating in market size of USD 2.44 trillion. The battery sector benefits equally from a problem-centered demand as cars ought to be less pollutive – hence relying on battery operation – or from the mobilization of electronic devices. Solactive’s Global BBIG Index takes a four-tier approach selecting one-quarter of its components from each of the abovementioned industry categories.
The Solactive Global BBIG Index
The Solactive Global BBIG Index is comprised of all financial instruments listed in Developed Markets as defined by the Solactive Country Classification Framework. Innovative health care companies, active in, e.g., gene editing and genomics, bioinformatics, and developing and producing biopharmaceuticals, are subsumed in the Biotech segment of the index. Companies developing software, cybersecurity, and cloud products and those offering services related to these products, as well as social network providers and e-commerce platforms, are classified as Internet companies at the index composition.
The Gaming Subindustry contains companies that develop or publish video games, operate or own competitive esports leagues or teams, and companies that produce hardware used in video games or esports, including augmented and virtual reality. Companies in the secondary battery industry, such as industrial and consumer battery manufacturers, battery component manufacturers, and battery cell part producers, are pooled in the Battery segment of the index.
The selection of the Solactive Innovative Global Equity Index’s constituents is based on Solactive’s proprietary Natural Language Processing Engine ARTIS®. ARTIS® utilizes advanced algorithms to parse high volumes of public documents evaluating companies’ exposure to various themes or topics. The sophisticated procedure not only detects potential index constituents considering a firm’s exposure to a theme but also ranks its importance to the very subject or industry.
“Thematic Investing is in great demand among investors, both retail and institutional alike,” comments Timo Pfeiffer, Chief Markets Officer at Solactive. “As an expert in thematic ETFs, Horizons ETFs now pooled four of the most promising industries with potentially high long-term demand into one easily accessible ETF. We are very happy to contribute as the index provider to this auspicious ETF launch.”
“Our continued partnership with Solactive AG has enabled us to continue to bring future-forward index strategies to Canadian investors, including today’s launch of BBIG, an ETF that offers exposure to four key industries leading the technological revolution: secondary batteries, biotechnology, internet and gaming,” said Steve Hawkins, President and CEO of Horizons ETFs. “In addition, BBIG’s innovative index uses Solactive’s proprietary ARTIS® algorithm, a prime example of the cutting-edge index technology now offered by Solactive. We are excited to work together again to offer exposure to the global digital revolution that is underway.”
The Horizons Global BBIG Technology ETF started trading on April 13th, 2021 on TSX.