State Street Global Advisors (SSGA), begun trading the SPDR FactSet Innovative Technology ETF (NYSE Arca: XITK) on Thursday, January 14, 2015. Here is a synopsis of the new ETF:
|Exchange: NYSE Arca
|Name: SPDR FactSet Innovative Technology ETF
|Net Expense Ratio: 0.45%
The SPDR FactSet Innovative Technology ETF seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the FactSet Innovative Technology Index.
The FactSet Innovative Technology Index is designed to represent the performance of U.S.-listed stock and American Depository Receipts (ADRs) of Technology companies and Technology-related companies (including Electronic Media companies) within the most innovative segments of the Technology sector and Electronic Media sub-sector of the Media sector, as defined by FactSet Research Systems, Inc. (Index Provider).
The Index Provider considers the most innovative segments of the Technology sector and Electronic Media sub-sector to be those with the highest revenue growth and believes that these companies are often involved in cutting edge research, innovative product and service development, disruptive business models, or a combination of these activities. In addition to traditional Technology companies, Electronic Media companies are included in the Index because of their core focus on technology and the integral role technology plays in determining how such companies operate, innovate and compete within their industry. FactSet defines the Technology sector to include Information Technology Services providers, Hardware manufacturers, Software manufacturers, Electronic Components manufacturers, and Manufacturing Equipment and Services providers. FactSet defines the Electronic Media sub-sector to include companies that produce media content in digital format and deliver, distribute and monetize their content via an electronic medium such as the Internet. FactSet sector determinations are based on a comprehensive, structured taxonomy designed to seek to offer precise industry classification of global companies according to the products and services sold by such companies (FactSet Revere Hierarchy).
The FactSet Revere Hierarchy reflects a variable depth structure that, with respect to the Index, consists of twelve levels of increasingly specialized Technology or Electronic Media sub-sectors. Technology and electronic media companies are classified or mapped to the sub-sectors from which they each derive 50% or more of their respective revenues.
A company will be eligible for inclusion in the Index if it satisfies the following criteria:
(i) is mapped to a Technology or Electronic Media sub-sector at the fourth level or lower (levels four through twelve) in the FactSet Revere Hierarchy;
(ii) is mapped to a sub-sector in the top quartile of FactSet’s composite revenue growth scoring system for the Technology sector or Electronic Media sub-sector (revenue growth scoring system);
(iii) has a market capitalization of shares publicly available to investors (i.e., a “float-adjusted” market capitalization) above $500 million with a float-adjusted liquidity ratio (defined by dollar value traded over the previous 12 months divided by the float-adjusted market capitalization as of the index rebalancing reference date) above 90% or have a float-adjusted market capitalization above $400 million with a float-adjusted liquidity ratio (as defined above) above 150%;
(iv) is a U.S.-listed stock or ADR; and
(v) has not had an initial public offering of shares within three months of the Review Selection Day.
The Index is equal-weighted to ensure that each of its component securities is represented in approximate equal dollar value at each reconstitution. The Index is capped at a maximum of 100 constituent securities. If there are fewer than 50 stocks suitable for inclusion based on the eligibility criteria, stocks mapped to the next highest-ranked quartile of sub-sectors would be added until the minimum number of Index constituents is met. To ensure that each component stock continues to represent approximate equal market value in the Index, adjustments, if necessary, are made annually after the close of trading on the third Friday of December (Reconstitution Day) based on information as of the last business day two weeks before the Reconstitution Day (Review Selection Day).
As of December 31, 2015, the Index was comprised of 85 stocks.
Index Top Holdings (12/31/2015):
|Super Micro Computer Inc
|Medidata Solutions Inc
|Tableau Software Inc A
|Qlik Technologies Inc
|Webmd Health Corp
Index Sector Breakdown (12/31/2015):
|Information Technology Services
XITK Home Page
Here is a comment from Nick Good, chief operating officer of the US intermediary business at State Street Global Advisors:
“In today’s low growth environment, investors have expressed a desire to access companies with the greatest potential to create change. XITK provides exposure to technology-related companies with high revenue growth, including those with disruptive business models. This means investing beyond the stalwarts of the tech space and capturing newer firms that are innovating and changing the landscape.”