Indxx Global Digital Healthcare Index licensed by KSM Mutual Funds as thematics boom for index firm
Israel-based KSM Mutual Funds has licensed the Indxx Global Digital Healthcare Index to launch the KSM KTF (4D) Indxx Global Digital Healthcare Dollar Hedge ETF, IGDHIN.
The ETF seeks to measure the performance of companies that provide digital healthcare services and make healthcare platforms available on the internet.
It encompasses the following sub-themes: telemedicine (connecting physicians and patients digitally), healthcare analytics (collecting, producing, or storing data for healthcare related statistical analyses, including artificial intelligence), and digital healthcare (developing remote patient monitoring systems to assist doctors and empower patients).
The industries identified through this research-based approach are those business segments that are expected to provide the most exposure to the future of healthcare in developed and emerging markets.
“We’re entering an exciting era in healthcare—a time when not only medical professionals are harnessing the latest technologies to provide patient care, but patients themselves have more insight into how to maintain a healthier lifestyle,” says Rahul Sen Sharma, (pictured) Managing Partner at Indxx. “We are excited to partner with KSM Mutual Funds Ltd, who recognise the value in offering investors access to a sector that produces better patient experiences and outcomes.”
Vaibhav Agarwal, Chief Revenue Officer at Indxx says, “Our index is the product of a unique methodology backed by top-notch research. It tracks the companies involved in the trends and technologies reshaping the healthcare industry, something that affects us all.”
Commenting on their partnership, Avner Hadad, CEO, KSM Mutual Funds Ltd, says, “KSM Mutual Funds Ltd. congratulate the continued fruitful collaboration of KSM and Indxx. KSM will continue to bring advanced, innovative and up-to-date indices to the Israeli market.”
As of July 20, 2021, the index has 46 constituents. It has a back tested date of May 31, 2016, and a live calculation date of April 26, 2021.
Sen Sharma, Managing Partner at Indxx which has indices tied to USD20 billion in AUM, comments that it is important that investors in thematic ETFs ‘look under the hood’ before investing.
“We were one of the early innovators in the thematic indexing space in 2015 when we launched a suite of thematic indices in the US. As the space has become more crowded, you have seen more indices which have very similar stated goals but when we look at them the methodologies are quite different in terms of how they attempt to target a particular theme,” he says.
Citing cloud computing as an example, Sen Sharma comments that he has seen a divergence of 20 per cent in annual returns between cloud computing indices.
“Somebody thinks when they are buying a cloud computing ETF they are all the same, but that isn’t the case,” he warns.
“Look under the hood and understand the index. Try to look at the exposure in terms of what is the index methodology doing in targeting different market caps; is the geographic exposure US only or global?”
He notes that the new range of space ETFs vary considerably geographically, and 40 per cent of the universe is non-US, so global coverage makes a difference.
In terms of trends that are still popular at the moment, Sen Sharma says that he is seeing a good amount of interest still in clean energy and infrastructure but again warns that infrastructure themed ETFs may vary considerably, with President Biden’s infrastructure bill in the US including home health care and senior support in the mix.
“There is a lot of continued interest in disruptive technology,” he says.