U.S. Markets closed

A New Disruptive Tech ETF on the Block

Zacks Equity Research
A new fund on disruptive technologies is in the market

ETFs devoted to technology are a big hit already this year with investors. Improving industry fundamentals and rapid adoption of emerging technology have made this possible. While the space is teeming with products, investors recently got one more fund targeted at augmented and virtual reality named Defiance Future Tech ETF (AUGR).(read: Cheapest ETFs in focus as fee war heats up).

 

Inside Defiance Future (AUGR)

 

This ETF tracks the BlueStar Augmented and Virtual Reality Index. This is an equal-weighted, rules-based index tracking the performance of a host of globally-listed stocks of companies that are in the research & development or commercialization of products and services related to augmented and virtual reality within one of the following categories: gaming systems and video games; artificial intelligence, cloud computing infrastructure; simultaneous localization and mapping; and so on.  

 

The index has 59 holdings with none having more than 2.65% share. The top holding is Nintendo Co. (NTDOY) (2.68%), followed by Silicon Motion Technology Corp Sponsored ADR (SIMO) (2.28%) and Advanced Micro Devices(AMD) (2.2%).

 

 

Interfaces and displays (36.32%), VR Gaming Systems (17.50%), Artificial Intelligence software (14.68%), Sensors and Biometrics (11.92%) and GPU and hardware (11.33%) get double-digit weights in the fund.

 

The major focus is on the U.S. economy, which accounts for 63.24%, with the next in line being Japan accounting for 16.41%. Since its inception on Aug 1, 2018, the fund has amassed about $2.52 million in assets, with an average daily trading volume of 14705. The fund charges  65 bps in  fees.

 

How Does Fit into a Portfolio?

 

In 2022, the augmented and virtual reality market is expected to reach more than $117 billion as per an article published on Marketwatch. AUGR offers a liquid and transparent way to invest in companies developing and commercializing the AR/VR technology (read: Explore FANG+ with these new ETFs).

 

There has been a spike in demand for AR and VR in corporate training. Statistics indicates that market growth will reach $2.8 billion by 2023 as per an article published on Forbes.Both AR and VR offer employee simulations, scenarios and information in a secure, risk-free environment.

 

Investors who want to cash in on the category of AR/VR, may see AUGR a lucrative bet.

 

Competition

 

There are other options available in the above-mentioned hi-tech space. These are Global X Future Analytics Tech ETF (AIQ), ALPS Disruptive Technologies ETF (DTEC) and Tactile Analytics AR/VR Virtual Technology ETF (ARVR). The fund should also face some competition from Global X Robotics & Artificial Intelligence Thematic ETF (BOTZ), First Trust ISE Cloud Computing Index Fund (SKYY), 

 

All of these funds are majorly U.S.-market centric, AIQ has 81%, DTEC 67%, ARVR 65%, SKYY 88% exposure with BOTZ having the least U.S. market exposure of 34%. On the expense ratio front, AUGR is beaten by DTEC, which has a lower expense ratio of 0.50% (read: Jim Rogers Launches Al Focused Global Macro ETF).

 

Want key ETF info delivered straight to your inbox?

 

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>

ETFs devoted to technology are a big hit already this year with investors. Improving industry fundamentals and rapid adoption of emerging technology have made this possible. While the space is teeming with products, investors recently got one more fund targeted at augmented and virtual reality named Defiance Future Tech ETF AUGR.(read: Cheapest ETFs in focus as fee war heats up).

 

Inside Defiance Future (AUGR)

 

This ETF tracks the BlueStar Augmented and Virtual Reality Index. This is an equal-weighted, rules-based index tracking the performance of a host of globally-listed stocks of companies that are in the research & development or commercialization of products and services related to augmented and virtual reality within one of the following categories: gaming systems and video games; artificial intelligence, cloud computing infrastructure; simultaneous localization and mapping; and so on.  

 

The index has 59 holdings with none having more than 2.65% share. The top holding is Nintendo Co. NTDOY (2.68%), followed by Silicon Motion Technology Corp Sponsored ADR SIMO (2.28%) and Advanced Micro DevicesAMD (2.2%).

 

Interfaces and displays (36.32%), VR Gaming Systems (17.50%), Artificial Intelligence software (14.68%), Sensors and Biometrics (11.92%) and GPU and hardware (11.33%) get double-digit weights in the fund.

 

The major focus is on the U.S. economy, which accounts for 63.24%, with the next in line being Japan accounting for 16.41%. Since its inception on Aug 1, 2018, the fund has amassed about $2.52 million in assets, with an average daily trading volume of 14705. The fund charges 65 bps in fees.

 

How Does it Fit into a Portfolio?

 

In 2022, the augmented and virtual reality market is expected to reach more than $117 billion as per an article published on Marketwatch. AUGR offers a liquid and transparent way to invest in companies developing and commercializing the AR/VR technology (read:Explore FANG+ with these new ETFs).

 

There has been a spike in demand for AR and VR in corporate training. Statistics indicates that market growth will reach $2.8 billion by 2023 as per an article published on Forbes.Both AR and VR offer employee simulations, scenarios and information in a secure, risk-free environment.

 

Investors who want to cash in on the category of AR/VR, may see AUGR a lucrative bet.

 

Competition

 

There are other options available in the above-mentioned hi-tech space. These are Global X Future Analytics Tech ETF AIQ, ALPS Disruptive Technologies ETF DTEC and Tactile Analytics AR/VR Virtual Technology ETF ARVR. The fund should also face some competition from Global X Robotics & Artificial Intelligence Thematic ETF BOTZ, First Trust ISE Cloud Computing Index Fund SKYY, 

 

All of these funds are majorly U.S.-market centric, AIQ has 81%, DTEC 67%, ARVR 65%, SKYY 88% exposure with BOTZ having the least U.S. market exposure of 34%. On the expense ratio front, AUGR is beaten by DTEC, which has a lower expense ratio of 0.50% (read: Jim Rogers Launches Al Focused Global Macro ETF).

 

Want key ETF info delivered straight to your inbox?

 

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>

 


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
 
Silicon Motion Technology Corporation (SIMO) : Free Stock Analysis Report
 
FT-CLOUD COMPUT (SKYY): ETF Research Reports
 
Nintendo Co. (NTDOY) : Free Stock Analysis Report
 
GLBL-X ROB&ART (BOTZ): ETF Research Reports
 
ALPS-DISRP TEC (DTEC): ETF Research Reports
 
GLBL-X FUT AN T (AIQ): ETF Research Reports
 
WEAR-ETF (ARVR): ETF Research Reports
 
DEFIANCE FUTURE (AUGR): ETF Research Reports
 
To read this article on Zacks.com click here.
 
Zacks Investment Research
 
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report