VanEck has launched an actively managed equity ETF in Europe providing exposure to companies aligned with the ‘smart home’ theme. The fund is the first ETF in Europe to target the ‘smart home’ megatrend. The VanEck Vectors Smart Home Active UCITS ETF has been listed on London Stock Exchange in US dollars (Ticker: CAVE LN ) and pound sterling ( CVGB LN ) and on Xetra ( VCAV GY ) and Euronext Amsterdam ( CAVE NA ) in euros.
Source: Original Postress-this.php?">VanEck unveils Europe’s first ‘smart home’ ETF
The fund is sub-advised by Dutch investment boutique Dasym, a specialist in thematic investing.
The fund’s interpretation of the smart home theme goes beyond narrow definitions that typically focus on a home setup where appliances and devices are controlled by voice, sensor, or mobile device to also incorporate technologies that enable people to work, study, exercise, shop, date, entertain and even manage their health from home.
Several tailwinds are powering this theme including faster internet connections through the 5G rollout; the development of complementary smart technologies such as sensors, grids, and networks; the advancement of artificial intelligence, which enables devices to anticipate and respond to individual needs; and changing consumer habits in favour of digitalization.
Commenting on the fund’s launch, Martijn Rozemuller, CEO of VanEck Europe, said: “The home of the future is digital, connected and, above all, intelligent. It changes the way we shop, work, communicate and entertain from home.”
Peter van Rooyen, CIO, of Dasym, added: “As more smart home applications make an appearance, a completely new ecosystem will start to develop. Based on historic experiences, we expect that the exact form of the smart home and the impact it will have on consumer practices will be broad and unexpected, offering ample opportunities to invest.”
Investment process
The first step of the investment process utilizes proprietary research to screen a universe of developed and emerging market stocks for companies with significant revenue or asset exposure to the smart home investment theme. Firms are removed if they fail to meet certain environmental, social and governance or liquidity criteria or exhibit ‘red flags’ such as unsustainable financial leverage, unproven technologies, or products with no clear path towards profitability.
The second step involves analyzing the secular growth opportunity tied to the smart home theme and identifying those companies best positioned to emerge as industry winners. This is primarily a fundamentals-based, bottom-up process that incorporates quality- and value-based metrics as well as an evaluation of how firms are managing ESG-related risks.
Dasym then selects 40 to 60 holdings representing the firm’s best ideas. The portfolio is adjusted on a monthly basis.
Over two-thirds (67.3%) of the ETF is currently allocated to US-listed stocks with the next-largest country exposures being Germany (7.8%), China (5.3%), Japan (5.1%), and Canada (2.7%). Communication services, information technology, and consumer discretionary stocks dominate with each sector representing between 26% and 29% of the total weight.
The top holdings include Amazon (3.2%), Nintendo (3.0%), Prosus (2.9%), Shopify (2.7%), and Alarm.com (2.6%). Data as of 9 November.
The ETF has an expense ratio of 0.85%. Income is accumulated.