Add this ETF for tech-themed exposure

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SPDR S&P Kensho New Economies Composite ETF (NYSEARCA:KOMP) offers investors an attractive way to tackle the Fourth Industrial Revolution by tracking the dynamic S&P Kensho New Economies Index. This innovative index reflects what is evolving. A landscape of industries driving technological advances and spanning themes as diverse as alternative finance, digital health, and space exploration. KOMP provides exposure to advanced technology sectors through careful subsector index construction, emphasizing U.S.-listed companies and employing a modified equal-weighting methodology. While KOMP is not the only solution for a portfolio, it remains an attractive option for those seeking growth-oriented investments amidst transformative technology trends. By integrating KOMP into your portfolio of other asset classes, you can increase your technology portfolio's exposure and drive future returns.

introduction

The SPDR S&P Kensho New Economies Composite ETF offers a unique opportunity for investors. Join the Fourth Industrial Revolution by tracking the S&P Kensho New Economies Index. This innovative index focuses on themes such as alternative finance, distributed ledger technology, space exploration, digital health, electric vehicles, robotics, clean energy, smart grids, and 3D to explore the industries driving the Fourth Industrial Revolution. Designed to capture the evolving landscape of technology and technology. printing etc. KOMP provides investors with exposure to forward-thinking themes in the technology sector by aggregating various sub-sector indices, making it an excellent choice for investors seeking technology-focused investments across diverse and impactful themes. This makes it an attractive option.

analysis

Index eligibility/methodology

The S&P Kensho New Economies Index applies various inclusion criteria, with a minimum market capitalization threshold of $100 million. The index includes stocks ranging from small-cap to large-cap stocks and excludes the OTC market. Eligibility is limited to securities listed on developed or emerging market exchanges, reducing risks associated with frontier markets. Each sub-sector within the index is carefully defined with a focus on identifying relevant business activities through review of SEC filings.

These subsectors aggregate into broader sectors such as human evolution, global democratized banking, smart transportation, intelligent infrastructure, the final frontier, and clean power. Additionally, investors can access specific sectors through dedicated ETF products such as tickers such as SIMS, ROKT, and CNRG. The index takes a nuanced approach by categorizing its constituents into “core” and “non-core” holdings, giving greater weight to companies that align more closely with the index's goals. Additionally, the index undergoes annual reconstitution and semi-annual rebalancing to ensure consistency with evolving market dynamics.

Features of ETFs

KOMP has multiple features that make it unique. The universe selected for this ETF is based solely on U.S. publicly traded companies, and the index uses a modified equal weighting methodology. As of April 30th, KOMP holds 435 stocks with different market capitalizations. However, the largest holding only has a weight of 1.6%, and the 10 largest holdings have ~12% of the index.

Basically, the index has a forward P/E ratio of approximately 18.6, a 3-5 year EPS growth rate of approximately 18.6%, a P/B of approximately 2.4, and a 30-day SEC yield of 0.94%.

The fund has a total expense ratio of 0.2%, has no options, and issues dividends quarterly.

The geographic breakdown is 84% ​​from the United States, 3% from China, and a slight mix of other countries such as Canada, Israel, Hong Kong, and Brazil.

The fund's key sectors are application software, aerospace and defense, and semiconductors.

As of March 31, the fund also had up to $179 million in short-term investments, split between money market funds and the State Street Treasury Billing Trust, which leverages up to 10% of the company's securities positions and Up to 1.7 billion funds can be obtained by combining. Net book value.

performance

If we look at its performance over the past five years, we can see that KOMP has underperformed SPY and QQQ, but has posted commendable returns of up to 40%. As a better benchmark, it significantly outperforms a similar ETF concept (ARKK), demonstrating its resilience and sustainable growth. A closer look at this graph shows that KOMP actually outperformed his SPY and QQQ for several periods, but eventually pulled back due to economic pressures.

For more context, KOMP has returned approximately 10% annually since its inception. This is a strong overall performance given the growth-focused nature and innovative background of the index.

Takeaway/Application

When considering an investment like KOMP, it's important to understand that this tool is intended to strengthen your portfolio through exposure to growth-oriented themes. Owning his well-diversified, growth-oriented ETFs, which focus on new technologies and trends, is applicable and future-proof. This can be combined with other positions to gain portfolio exposure that may be lacking, or as a better solution to thematically similar but less disciplined ETFs. can. Parameters set within an ETF for position sizing can help alleviate some of the subjectivity for portfolio managers.

Additionally, the fund's more passive aspect and lower expense ratio make it more accessible and attractive to long-term investors. There are also small dividends that are likely to increase as the lifecycle of the position progresses, which can be a strong compounding aspect for the fund going forward, and can also help drive price movement and capital gains accretion. Helpful. In addition to the geographic advantage of the United States, the diversity of company sizes and fields is also very attractive. This allows ETFs to influence market size trends as well as augment other holdings, such as broad market, international large-cap, and bond positions, whether large, mid-cap or small-capitalized. can.

Considering the downsides, the biggest factors are volatility, high turnover, and lack of access to options. The volatility aspect is a double-edged sword, but ETFs have historically been more volatile and underperformed for their excess risk. High turnover is not ideal because it increases costs, taxable events, tracking errors, and overall uncertainty for investors. Lack of access to options also limits the strategic actions investors can take on their portfolios. There are other risks to his ETFs, such as KOMP. Investors should consider the speculative nature of small businesses and the significant need for capital for such thematic investments in a high interest rate environment. These companies could be under pressure at various levels, which could ultimately hurt KOMP's bottom line.

conclusion

KOMP offers investors a unique opportunity to participate in the Fourth Industrial Revolution by tracking the S&P Kensho New Economies Index. This innovative index captures the evolving landscape of industries and technologies driving the Fourth Industrial Revolution, focusing on themes such as alternative finance, digital health and electric vehicles. KOMP provides exposure to forward-thinking themes in the technology sector through a variety of sub-sector indices, with rigorous eligibility criteria to ensure a carefully selected portfolio. In particular, KOMP stands out for its focus on U.S.-listed companies, its diversification, and its modified equal-weight methodology. Despite the laudable historical performance, investors should be aware of certain risk factors. KOMP remains an attractive option for investors seeking exposure to growth-oriented themes and innovative technologies within a well-diversified ETF framework.