The Sygnia Itrix 4th Industrial Revolution Global Equity ETF, the first exchange traded fund of its kind in South Africa, was listed on the JSE this week. It offers local investors the opportunity to gain exposure to global companies at the forefront of the so-called Fourth Industrial Revolution.
Traditional global equity funds focus on old-world manufacturing and services-oriented companies, according to Sygnia. The Sygnia ETF diversifies away from this by tracking the Kensho New Economies Composite Index, an index compiled and owned by Kensho Technologies, a United States big data analytics company. The index blends exposure to 16 different Kensho market indices, each representing a different “new economy” industry sector.
According to Wikipedia, the First Industrial Revolution was the industrialisation of Europe and America in the 18th and 19th centuries; the Second Revolution was the major advance in the use of electricity and associated inventions just prior to World War 1; the Third, or Digital, Revolution was the development of the computer and subsequent digital technology, which continues to this day; and the Fourth Industrial Revolution will be marked by “emerging breakthroughs in a number of fields, including robotics, artificial intelligence, nanotechnology, quantum computing, biotechnology, the Internet of Things, 3-D printing and autonomous vehicles”.
Sygnia already has the 4th Industrial Revolution Global Equity Fund, a unit trust fund that differs from the newly launched ETF in that Sygnia itself is responsible for blending the 16 Kensho indices. Returns on the two funds are therefore expected to differ.
Ben Meyer, the head of Sygnia Itrix, says: “The newly enhanced Sygnia Itrix range provides access to local and international investments through a South African-regulated structure, giving choice in an easy and cost-effective way. We are very excited to be listing the Sygnia Itrix 4th Industrial Revolution Global Equity ETF, because this is an excellent growth area and is unique in the market.”
Meyer says Sygnia has enlisted the services of Jane Street, one of the largest ETF market makers in the world, to enhance liquidity and, in turn, lower the costs for investors.