Europe’s first thematic ETF focusing exclusively on digital infrastructure and connectivity lists on London Stock Exchange

A first-to-market thematic ETF focusing on digital infrastructure and connectivity sponsored by Quikro is to launch across Europe via the HANetf platform. The Digital Infrastructure and Connectivity UCITS ETF (DIGI) has listed initially on the London Stock Exchange. 

The new ETF captures companies that are positioned to benefit most from the explosive growth of the digital infrastructure virtuous circle of expanding users, data, applications, and bandwidth. Global internet traffic is expected to grow 370 per cent by 2022 according to Cisco Systems as the number of users, the number of devices per user, and the amount of data per device all increase. This is underpinned by massive transformations in economic, cultural and social needs as people increasingly digitise how they live, work, study, transact and communicate. 

The Digital Infrastructure and Connectivity UCITS ETF (DIGI) focuses on six key sub-themes which follow the journey of data as it travels from storage to end-user: data centres; digital connectivity; data networks; digital transmission; digital processing; and digital services and intellectual property.

The ETF has been developed by Quikro, an investor in the financial services industry, which sponsors the launch and development of innovative exchange-traded funds (ETFs), and HANetf. Working with Tematica Research LLC, they have developed a new and unique index for the ETF. 

The Digital Infrastructure and Connectivity UCITS ETF (DIGI) will follow a new index called Tematica BITA Digital Infrastructure and Connectivity Index (TBDIGI), which comprises over 80 global equities who are at the forefront of the digital infrastructure revolution. Companies in the index include InterDigital (IDCC), Fastly (FSLY), Skyworks (SWKS) and Equinix (EQIX). The performance of the Tematica BITA Digital Infrastructure and Connectivity Index (TBDIGI) returned 40.87 per cent over the last 12 months (Source: BITA, as of 30 September, 2020). Past performance is no guarantee of future performance.

While other investment strategies may focus on the build-out of single digital segments such as 5G or cloud or telemedicine, the Digital Infrastructure and Connectivity UCITS ETF (DIGI) seeks to capture the explosive growth in data traffic across all digital segments as next-generation connective technologies roll out, resulting in ever-increasing demand for better digital infrastructure and connectivity solutions.

Omar ElKheshen, CEO of Quikro, says: “The roll-out of 5G, Cloud, IoT, VR, and other disruptive technologies, in addition to permanent lifestyle changes linked to Covid-19, will continue to accelerate the trend towards further digitisation and virtual communication.  With that arises a growing and insatiable need for digital infrastructure to support everyday digital activities and the immense amount of data flowing behind them.  This is a huge opportunity for investors and our new ETF, the Digital Infrastructure and Connectivity UCITS ETF (DIGI), will provide an opportunity to potentially capitalise on this.”

Christopher Versace, Chief Investment Officer of Tematica Research, says: “With almost five billion people connected to the internet today, the demand for continuous access to digital information and communication is growing exponentially. By 2022, new and existing applications are expected to drive mobile data traffic alone to 930 exabytes per year, an 11,300 per cent increase over 2012, which equates to all the movies ever made crossing global mobile networks every five minutes. 5G and other disruptive broadband-enabling technologies will foster new rich data applications such as semi-autonomous and autonomous vehicles that will ultimately drive network congestion and require further infrastructure investment buildout.  This in turn will fuel development of new applications and data, otherwise known as the virtuous digital circle. The Tematica BITA Digital Infrastructure and Connectivity Index was designed to capture this long-term trend.”

Nik Bienkowski, Co-CEO of HANetf, says: “The Digital Infrastructure and Connectivity UCITS ETF focuses on some of the most exciting and transformational themes in the world today and allows investors to invest in this long term megatrend of exponential growth in traffic using digital infrastructure. We are delighted to have worked with Quikro and Tematica on the development of this exciting new ETF. This is another ‘first’ to join the list of innovative market leading ETFs on our platform. DIGI will be a great addition to our burgeoning Thematic ETF offering and reinforce the value add HANetf is bringing to end investors.”