Exchange-traded fund (ETF) provider BetaShares is continuing to experience strong demand for its global technology sector ETF range from SMSFs, advisers, self-directed investors and millennials.
BetaShares chief economist David Bassanese said these cohorts are seeking diversified exposure to the global technology sector, which is reflected in the year-to-date net flows of over $110 million into the firm’s NDQ ETF.
The NDQ ETF aims to track the NASDAQ 100 Index, which comprises the 100 largest non-financial companies listed on the NASDAQ stock exchange. It provides access to global technology companies, including Amazon, Facebook, Google and Netflix, in a single trade on the Australian Securities Exchange.
“Technology stocks have been remarkably strong, particularly in the past three years,” Bassanese said.
“Contrary to what many may think, in the main prices have gone up because earnings have grown, unlike the dotcom bubble of the late ‘90s, where there was a disconnect between earnings growth and the stock prices. The recent pullback has, in fact, improved valuations for investors considering this sector.”
Speaking at an end-of-the-year event in Sydney hosted by BetaShares and NASDAQ on key trends and investment opportunities in technology leading into 2019, BetaShares capital markets and institutional business executive director Peter Harper said while it is difficult to decipher the appetite of individual SMSF investors, the firm has noted strong adoption of technology exposures listed by the firm to date.
“I think what really has changed for the game in that respect was previously these companies were very difficult to access. They often traded offshore,” Harper said.
“There’s very little technology and cybersecurity and robotics exposure available in the Australian market, so having that available in an ETF that’s diversified to begin with but gives immediate access in one trade to that diversified basket, I think helped many investors get over that hurdle of investing in some of those areas.
“Not too many people, for example, would be an expert on cybersecurity or on robotics and artificial intelligence.”
NASDAQ head of research and development Dave Gedeon said cybersecurity is a growing technology thematic in Australia and around the world, and BetaShares is aiming to track it through its global cybersecurity ETF, or HACK.
“There’s a significant growth opportunity in the global cybersecurity sector as governments and corporations around the world boost spending to protect themselves from cyberattacks, which have been on the rise and are expected to continue to be a major threat,” Gedeon said.
“So far, a lot of this demand has gone into IT security. However, in the coming years, we expect that most of the growth will come from segments like mobile security, internet of things security and specialised threat analysis and protection.”
The HACK ETF has grown to over $120 million in assets since it was launched just over two years ago.
“It actually saves people money, saves companies money to be investing in cybersecurity because this is the last thing you want, separate even from headline risk. This is just tangible cost in terms of cybersecurity,” Gedeon said.