Thematic tech from ProShares
Leveraged and inverse ETF specialist ProShares has launched three thematic ETFs on the NYSE.
- ProShares Smart Factories ETF (MAKX)
- ProShares Big Data Refiners ETF (DAT)
- ProShares S&P Kensho Cleantech ETF (CTEX)
Expense ratios for all of them are 0.58%.
CTEX is perhaps more accurately a clean energy ETF. It tracks a S&P Kensho index made up mostly of solar companies. But a couple of semiconductors, hydrogen and wind power are also thrown in.
DAT invests in big data companies. A revenue purity filter requires companies to make 75% of their revenue from data handling, software, and storage. This weeds out the FANGs and means the fund is made up heavily of cloud computing pure-plays like Snowflake and Datadog.
MAKX invests in companies that push supply chain modernisation, such as those making factories more automated. This includes software, semiconductors and robotics components companies.
Bernie’s commentary – going legit
I remember a few years back ProShares listed a pet care ETF with the ticker PAWZ. (Our review from 2018 is here). The idea was that globally, people are spending more money on pet care, meaning pet-related companies stand to benefit. The investment thesis proved correct, and the fund has since gone on to outperform and rake in more than $300M in assets.
PAWZ matters because it was one of ProShares first thematic ETFs, and formed part of its rebranding strategy. In recent years, ProShares has launched a suite of thematic ETFs (including the three today) as it tries to clean up its brand. Rightly or wrongly, leveraged and inverse funds – ProShares bread and butter – have are regarded as not as pure ETF products. The big ETF providers – Vanguard, BlackRock, SSGA, Invesco – have campaigned against them and asked exchanges to ban them from being called ETFs.
So the point of today’s launches, as well as making money, is to help ProShares go more mainstream. Of the three of them, my favourite is probably MAKX. Cleantech has rapidly crowded this year, while I feel DAT is covered by cloud computing ETFs. Still, I’m always a fan of thematic ETFs.