STOXX Thematic Indices
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STOXX Thematic Indices August 2021 Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Qontigo is a financial intelligence innovator, Optimizing ImpactTM from risk to return with our client partners. 1 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Content 04 Introduction 87 Appendix: Sustainability Appendix: Future Technology 09 Revenue Based Thematic Indices 91 13 Artificial Intelligence IP Based Thematic Indices 19 Alternative Approaches 22 Appendix: Socio-demographics 2 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Introduction 3 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Qontigo’s STOXX is an Innovator and Leader in the Thematics space THIS IS A SAMPLE TEXT > Dedicated thematic product developers researching1 new themes, allowing Expertise us to identify the recent trends ahead of the competition THIS IS A SAMPLE TEXT > Solutions that are intended to span business cycles Long Term > Focus on megatrends rather than short termism2 THIS IS A SAMPLE TEXT> Work closely with clients from idea generation to launch Partnerships This is a sample text. Insert your >desiredDrawtext fromhere. This bothis a externalsample text .andThis isinternala sample textexpertise. 3 (Sustainable Think Tank) Insert your desired text here. This is a sample text. Insert your desired text Customization > Our expertise allows us to easily tweak a concept, the starting universe, THIS IS A SAMPLE TEXTand apply additional considerations e.g. ESG filters This is a sample text. Insert your desired text here. This is a sample text. This is a sample text. 4 Insert your desired text here. This is a sample text. Insert your desired text Open Architecture > Partner with trusted, recognized and reliable data providers ThisTHISis aISsample A SAMPLEtext. Insert yourTEXTdesired text here. This is a sample text. This is a sample text. 5 Insert your desired text here. This is a sample text. Insert your desired text 4 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Thematic Solutions that Provide Exposure to Key Megatrends Megatrends – powerful, transformative forces that could change the global economy, business and society Future Technology Technological advancements that are changing our daily lives Socio-demographics Sustainability Changes in global Benefit from the increasing demographics will bring societal awareness of significant challenges and environmental and opportunities for societies and sustainability issues that are businesses impacting our quality of life 5 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Broad Range of Themes Accessible Qontigo Thematics Socio - demographics Sustainability Future Technology Ageing Breakthrough Broad Electric Smart City Artificial Automation & Blockchain Population Healthcare Infrastructure Vehicles Infrastructure Intelligence Robotics Health and Housing & Digital Millennials B.R.AI.N Digitalization Weight Loss Construction Security Sharing Silver Next Pet Care Economy economy Fintech Industry 4.0 Generation Telecom Video Gaming Smart City & eSports Smart Factory Illustrative purposes, not exhaustive Approximately EUR 10bn1 in ETF AUM linked to STOXX thematic indices 1) Source: Qontigo, June 2021 6 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Techniques to Capture Exposure to Selected Thematics Thematic Indices 1 Revenue Exposure Based 2 AI IP Based 3 Alternative Approach Target Identifying and selecting companies exposed to specific thematic . Considering revenue exposure to pre- . Applying knowledge graphs to . Combining different datasets to capture defined sectors interpret unstructured data the theme Approach . Artificial . Housing Construction . Artificial Intelligence . Electric Vehicles & Driving Technology Intelligence . Smart Cities . Blockchain . Smart City Infrastructure Indices . Fintech . Industry 4.0 . Millennials . Sharing Economy . Silver Economy . Smart Factory . Digital Security . B.R.AI.N 7 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Revenue Exposure Based Thematic Indices Construction 8 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Revenue Exposure Based Thematic Indices Step 1: Finding the right data-source - Factset RBICS Example: Revenue Exposure by Sector/ Industry breakdown for Google 9 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Revenue Exposure Based Thematic Indices Step 2: Identifying the relevant sectors (e.g. Millennials) Digitization1) Experiences1) . Career Classifieds and Directories Media and Sites . Budget Hotels and Motels . City Guides Content Providers and Sites . Console Games Software . Communication and Collaboration Content Sites . Electronic Gaming/Entertainment Electronics Makers . Food Delivery Services . Events, Tickets and Mixed-Type Recreation . Handheld and Smart Phone Games Software Millennials Healthy lifestyles1) Value1) . Activewear and Outerwear Apparel Production . Internet Discount Stores . Athletic Footwear Production . Internet Off-Price Retail . Dietary and Naturopathic Supplements . Off-Price Retail Stores . Fitness and Exercise Equipment . Internet Warehouse / Superstore Retail . Fitness and Recreational Sports Centers . Nutritional Supplement OEMs 1. List of Level 6 RBICS Sectors is an indicative sample, and not meant to be exhaustive 10 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Revenue Exposure Based Thematic Indices Step 3: Constructing the Index . The index universe is the STOXX Developed and Emerging Markets TMI Universe . Only those companies with 3-month MDTV above EUR 1,000,000 are considered . Companies that Sustainalytics considers as non-compliant with the United Nations Global Compact Principles or Filter companies that Sustainalytics identifies to be involved with controversial weapons, are excluded1 . Companies are included in the index if they generate more than 50% of their revenues from the identified industries, related to each theme. Selection . The selected index components are weighted based on free float market capitalization, adjusted for revenue exposure from the identified industries. Dual listed companies and/or multiple share classes are represented by the most liquid stock. Weighting . Securities are capped according to 35/8/4.5 rule 1. For applicability to each index, please refer to the detailed STOXX Index Methodology Guide 11 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Artificial Intelligence IP Based Thematic Indices Construction 12 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Artificial Intelligence IP Based Thematic Indices Step 1: Finding the right partner Yewno . Yewno builds knowledge discovery software and services, leveraging machine learning, computational linguistics, and a vast reservoir of information from the most respected content providers in the world . Their technology began as academic research in applied mathematics. The goal was to best understand political, economic, financial, and social data . Yewno currently has numerous partnerships across the finance sector, top research universities, publishers and content aggregators worldwide 13 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Artificial Intelligence IP Based Thematic Indices Step 2: Setting the stage – development of knowledge graphs The use of “Knowledge Graphs” to understand and identify Blockchain . Yewno’s Knowledge Graph is able to recognize a concept amongst an enormous volume of unstructured data and to project its significance into an inferential semantic space where such a concept is correlated to others so as to create a mesh of potential inferences . Interpreting “Blockchain” as a concept . A concept is an Interbanking Intrest Rates abstraction of an idea, Loan a thought, a theme or Quantitative Easing an expression Mario Draghi Bank portrayed in various Balance Sheet forms Identification Analysis of correlation and Projection of Knowledge and extraction construction of Inferential space space and elaboration of of concepts Inferences 14 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Artificial Intelligence IP Based Thematic Indices Step 3: Putting knowledge graphs to use Asset Universe Blockchain Patents Blockchain Adopters Knowledge graph assists decision making process Portfolio of companies with IP in Blockchain, i.e., on determining Patents that are related to with granted patents that are related to Blockchain Blockchain List of International Global universe of assets constituents of the Patent Classification Block chosen parent index. (IPC) Codes chain relevant for IP Blockchain US and International patents database 15 | Copyright © 2021 Qontigo GmbH. Qontigo is part of Deutsche Börse Group. Artificial Intelligence IP Based Thematic Indices Step 4: Defining Blockchain IP exposure and Blockchain IP contribution . This measure indicates the percentage of total Blockchain patents granted to a company vs. the total number of patents granted to that company over the same period. Blockchain . Indicates the significance of Blockchain intellectual property to the company’s business activities. IP Exposure . This measure indicates the percentage of total Blockchain patents granted to a company vs. the total number of Blockchain patents granted globally over the same period. Blockchain IP Contribution . Indicates the significance