Purpose announces pure-play software ETF

Launched in Europe, index ETF provides ESG-screened exposure to software-as-a-service companies

Purpose announces pure-play software ETF

Purpose Investments has teamed up with an independent European specialist to introduce another ETF first.

Expanding on its partnership with HANetf, Purpose has announced the launch of the Purpose Enterprise Software ESG-S UCITS ETF, which is the world’s first pure-play enterprise software ETF to list on the London Stock Exchange.

Listed under the ticker SOFT, the ETF will provide exposure to a diverse ESG-screened portfolio of software-as-a-service (SaaS) enterprise software companies – including the likes of Adobe, Shopify, and Twitter – that are at the front lines of the digital revolution.

“The software industry plays an important role in our everyday lives and these businesses represent some of the most exciting business models of the future,” said Som Seif, founder and CEO of Purpose Investments. “The global pandemic accelerated growth in the sector, as businesses were forced to pivot and further embrace digitisation, and we believe these trends will have long lasting implications.”

SOFT will be tracking the Solactive Purpose Enterprise Software ESG Screened Index NTR (SOFTWARN), whose past 12-month performance has translated into a 50.28% return; in the last five years, it has returned 473.27%. The fund will also have a total expense ratio of 0.59%.

Nicholas Mersch, portfolio manager at Purpose Investments, highlighted numerous strengths among software companies, including highly scalable recurring revenue, resilience in any market environment, high gross margins, strong free cash flow, and bulletproof balance sheets.

“We believe that if a company does not consider itself a technology company, it must buy a product from one, become one, or get left behind,” said Nicholas Mersch, portfolio manager at Purpose Investments. “Software enables this, which is why we are particularly excited about SOFT’s SaaS focus.”

In line with Purpose’s practice of embedding ESG in its investment processes, SOFT also screens out companies with exposure to controversial weapons and fossil fuels.

The fund will also be available for trading on Xetra, a German electronic exchange, on August 3. Later in the month, it will also be listed on Borsa Italiana.


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