HANetf and Purpose Investments launch enterprise software ETF with ESG screen
HANetf has announced the launch of Europe’s first Enterprise Software ETF with an ESG screen, Purpose Enterprise Software ESG-S UCITS ETF (Ticker: SOFT).
‘SOFT’ will list on London Stock Exchange in late July and will be passported for sale across Europe. It is designed to provide investors with exposure to a varied, ESG-screened, selection of enterprise software companies at the forefront of the digital revolution.
The Purpose Enterprise Software ETF was launched in partnership with Canada-based ETF and asset manager, Purpose Investments, and European ETF specialists, HANetf. This will be the third ETF that Purpose Investments and HANetf have listed together in Europe, following the launch of The Medical Cannabis and Wellness UCITS ETF in 2020 and Europe’s first ETF with a carbon offset, HANetf S&P Global Clean Energy Select HANzero UCITS ETF in June 2021.
SOFT will offer investors diversified exposure to global software companies, including household names such as Adobe, Shopify and Twitter as well as holdings such as Paycom Software, Palo Alto Networks and Hubspot.
The software industry has benefited greatly from the acceleration of digital transformation as industries move towards automation and improved operational efficiency. Through SOFT, investors have an efficient means of accessing these trends.
Unlike many information technology ETFs, which are allocated across SaaS (Software as a Service), PaaS (Platform as a Service) and IaaS (Infrastructure as a Service) companies, SOFT will focus on SaaS companies specifically, as Purpose and HANetf believe this area is primed to be a significant beneficiary of global software megatrends.
As an example, cloud services revenue is forecasted to exceed USD276.8 billion in 2021, 7x the rate of overall IT market growth, and SaaS companies account for 68 per cent of this revenue.
SOFT contains an ESG screen to exclude companies with exposure to controversial weapons and fossil fuels. The Purpose Enterprise Software ESG-S UCITS ETF is expected to be scheduled as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).
SOFT will track the Solactive Purpose Enterprise Software ESG Screened Index NTR (SOFTWARN). The SOFTWARN index performance shows it achieved 50.28 per cent returns in the past 12 months and 473.27 per cent in the last five years. The SOFT enterprise software ETF will have a Total Expense Ratio of 0.59 per cent.
Som Seif, Founder and CEO of Purpose Investments says: “The software industry plays an important role in our everyday lives, from business support to photo editing, and has long been at the crux of commercial enterprise.
“The global pandemic drove unprecedented growth in the sector, as businesses were forced to pivot and further embrace digitisation, and we believe these trends will have long lasting implications.
“As the global economy continues to recover, the Purpose Enterprise Software ESG-S UCITS ETF will provide investors with exposure to the varied, and ESG screened, selection of companies at the forefront of the digital revolution.”
Hector McNeil, co-Founder and co-CEO at HANetf, says: “A big part of our strategy at HANetf has been to offer investors exposures to structural shifts within the world economy.
“The software industry has played a huge role in the digital revolution and has only come further into focus following the events of 2020, where efficiency within the workplace (office or home) became of paramount importance.
“We’re delighted to work alongside Purpose Investments once again with the launch of Purpose Enterprise Software ESG-S UCITS ETF and provide investors with an efficient structure with which to capture this trend.
“The addition of SOFT to the HANetf platform reinforces our strong position of offering the most extensive thematic ETF platform in Europe and further focuses on bringing unique offerings and not “me too” ETFs. This ETF range is also unique as it’s backed up by experts in the sectors covered and a monthly report”