ProShares Launches Two Thematic ETF in One Day – ETFs Are Tracking Solactive Indices
Thematic investment strategies have exploded in popularity in recent years. 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 innovations, and advancements. The resonance in the investment community is very affirmative as the 200+ thematic ETFs on the U.S. market alone have raised nearly USD 170 Billion in assets. ProShares, a long-time innovator in the financial industry, now releases ETFs focused on two innovative trends, the ProShares Nanotechnology ETF (TINY) and the ProShares Smart Materials ETF (TINT). The ETFs started trading on NYSE Arca on October 27th, 2021.
Nanotechnology is the study and application of matter on an atomic and molecular level, at dimensions between 1 and 100 nanometers. To put this into perspective, 1 nanometer is approximately 1/90,000 the width of a human hair. The application of Nanotechnology takes place in almost every industry, from everyday materials and processing, communications, medical and healthcare technologies, to the manufacturing of smaller and more powerful computer chips. The market size of Nanotechnology is projected to reach USD 120 Billion by 2025 with the emergence of new use cases and applications, such as nanoscale sensors and communications devices. The Solactive Nanotechnology Index serves as the underlying of the ProShares Nanotechnology ETF. The Index is composed of 30 companies active in the fields of nanomedicine, nanomaterials, nanoelectronics, nanometrology, or molecular nanotechnology. Companies that develop technologies promoting advancements and research related to nanotechnologies are also eligible for inclusion.
ProShares’ second ETF launch revolves around the topic of smart materials, which is the latest revolution in the field of material sciences. Smart materials are responsive to changes in the environment, such as humidity, pressure, temperature, moisture, pH, electrical currents, or chemical compounds. Wrinkle-reducing skin patches, self-repairing window glasses, clothing that adjusts to the weather condition – science-fiction could become a reality thanks to the sheer limitless applications of smart materials. The world’s first ETF incorporating companies in this space is the ProShares Smart Materials ETF. The ETF tracks the performance of the Solactive Smart Materials Index. The index is comprised of 30 companies that produce intelligent or responsive materials with modifying properties, as well as materials with outstanding qualities that give them a disruptive and pioneer property. In addition, companies developing technologies that promote research and advances related to smart materials are also included.
Both indices derive their constituents via Solactive’s proprietary natural language processing algorithm 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.
Timo Pfeiffer, Chief Markets Officer at Solactive, comments: “Nanotechnology can be applied across almost every industry worldwide. One of the most important applications is the ability to tailor the structure of materials at extremely small scales to achieve specific properties for a plethora of uses. For example, new materials are being developed for the light-weighting of cars, trucks, and airplanes, which could lead to significant fuel savings and positive environmental impacts. As nanotechnology continues to benefit society with new applications, the industry is likely to continue to grow.”
Scott Helfstein, PhD, Executive Director, Thematic Investing at ProShares, comments: “The pace of technological progress today is staggering, and advances in fields like nanotechnology and smart materials will pave the way towards a more efficient and smarter future. From nanotechnology that has pushed the limits of semiconductor speed to adaptive materials that will be used to make stronger and lighter airplanes, these are types of forward-looking innovative themes that should pique investor interest.”