A Dynamic and Actively Managed Thematic ETF
Most thematic ETFs focus on one theme, and track a passive index geared to it. Though the index might be rebalanced quarterly, the theme stays constant.
Robeco has launched a product, Robeco Dynamic Theme Machine UCITS ETF (RDYN) that uses NLP (Natural Language Programming) techniques to spot the most interesting themes and move between them. Thanks to these techniques, Robeco brand it as a “next generation” investment strategy.
The product could be exposed to emerging long-term macro-economic, technological, environmental, demographic and healthcare related themes. Though the NLP models are being used to identify themes, some human discretion also selects them.
This is a transparent ETF and the Robeco website has a spreadsheet of 106 holdings. The largest theme currently appears to be technology related. The top six holdings are all MAG7 members: Apple, Nvidia, Microsoft, Amazon, Meta and Alphabet, making up over 25% of the portfolio.
Healthcare, pharmaceuticals, biotech and medical technology is also a substantial weighting with 20 healthcare names, led by Abbvie, Novartis and Intuitive Surgical.
However, since the product dynamically rotates between themes, investors might want to monitor it for a few months to see which other themes it may switch into.
Charges of 0.55% are a bit higher than some passive thematic ETFs but also lower than some active ETFs.
Robeco has also launched three actively managed ETFs based on its 3D philosophy of risk, return and sustainability, which achieve a better sustainability and environmental rating than broad indices: Robeco 3D Global Equity UCITS ETF (3DGL), Robeco 3D US Equity UCITS ETF (3DUS) and Robeco 3D European Equity UCITS ETF (3D3D).
Their charges of 0.25% are relatively low for an active equity ETF or mutual fund available to retail investors. However, the strategy category for these three is “enhanced”, meaning they are “enhanced index” products that hug the benchmark fairly closely. Therefore, they are arguably not fully fledged active products and their fees should probably be somewhere between active and passive.
All four report under category 8 of the EU SFDR (Sustainable Finance Disclosure Regulation).
A 3D emerging market ETF is slated for 2025.
