SOURCE: EQM Capital

EQM Capital

March 09, 2016 09:00 ET

EQM Indexes LLC Launches Wearables Index

The WEARXT Index Tracks Companies With Wearable Tech Products or Components

SAN DIEGO, CA--(Marketwired - March 09, 2016) -  EQM Indexes LLC, ("EQM Indexes"), a San Diego-based provider of index benchmarks for Exchange Traded Products (ETPs), has launched an index that tracks the "wearables" segment. The index is the firm's second index offering this year. EQM Indexes licensed its Online Retail Index™ (IBUYXT) to Amplify Investments in January 2016 (see Press Release).

Jane Edmondson, co-founder of EQM Indexes, said: "We are proud to offer this global index to track the growing wearable technology sector, which by some estimates is expected to grow into a $70 billion industry over the next five years.(1)"

"Wearables" are mobile devices that can be worn on a user's body or attached to clothing for application categories such as: Sports and Fitness, Industrial/Military, Infotainment/Lifestyle, and/or Healthcare and Medical.

Examples of wearables devices include: activity trackers, smart watches, smart glass, body cameras, health monitors, virtual reality headsets, hearables, and wearable industrial computers. 

The WEARXT Index (the "Index") tracks the combined performance of a basket of 45 to 55 global stocks that derive revenue from wearable technology products and/or components. Some of the recognizable U.S. companies in the index are Fitbit, GoPro, Garmin, and Apple. In addition, the Index has exposure to many global companies involved in wearable technology including Adidas (Germany), Seiko (Japan) and GN Store Nord (Denmark).

In order to be eligible for inclusion in the Index, companies must derive revenue either from the sale of wearable devices or their underlying components like sensors, semis, and displays. Core wearable holdings, defined by EQM Indexes as deriving a greater percentage of revenues from wearable devices, receive an increased weighting in the Index and non-core and/or component manufacturers get a smaller weight. 

"Wearables are the gateway to the Internet of Things." -- Jane Edmondson, EQM Indexes

Why a wearables index?

In our view, a wearable index is timely and serves as a needed benchmark to track the opportunity of the growing wearables industry:

  1. Growing Global Opportunity - According to International Data Corporation (IDC), the worldwide wearable device market is expected to reach a total of 111.1 million units shipped in 2016, for an annual gain of 44.4% over 2015. By 2019, total shipments are expected to reach 214.6 million units, resulting in a five-year compound annual growth rate (CAGR) of 28%.(2)
  2. Gateway to the Internet of Things - Wearable devices seamlessly integrate computer and monitoring functionality into our daily lives. Wearables provide quick and easy access to reliable and immediate information, empowering the wearer and acting as a "gateway" to the connected world and Internet of Things.
  3. Expanding Use Cases - Whereas wearable devices such as smart watches and activity trackers lead the consumer category, the use cases for wearables continues to expand for business, healthcare, government, and military. According to Forrester Research, 76% of global tech and business leaders have wearables on their agenda as a tool to harness data and enhance customer interaction.(3) 
  4. Untethered Potential - As wearable devices "untether" from smart phones and can serve as stand-alone devices, their potential uses will expand, serving as "free agents" in the Internet of Things. 

Index Information

WEARXT, is a modified equal-weighted index of approximately 45-55 global companies rebalanced and reconstituted on a semi-annual basis in June and December. Price and return data are independently calculated and published by Solactive AG. Quotes for the symbol "WEARXT" can be accessed via Bloomberg, Reuters, and other financial data providers. Investors may not make direct investments into any index. Additional information about the index can be accessed from EQM Indexes's dedicated website at www.eqmindexes.com.

EQM Indexes LLC has licensed its Wearables Index exclusively to ETF provider Exchange Traded Concepts (ETC). The fund is being sponsored by Eve Capital.

About EQM Indexes LLC

EQM Indexes, LLC is a woman-owned firm dedicated to creating and supporting indexes that track growth industries and emerging investment themes. Co-founded by Jane Edmondson, a former Institutional Portfolio Manager with more than 24 years of investment industry experience, EQM Indexes' index designs spans a wide range of asset classes and financial instruments. EQM Indexes does not provide investment advice, nor offer the sale of securities, but does partner with issuers and works jointly with other index firms to provide benchmarks for Exchange Traded Products (ETPs) such as Exchange Traded Funds (ETFs), Exchange Traded Notes (ETNs), and other similar products.

Follow us on Twitter @eqmindexes

See Additional Disclosure

(1) Grand View Research, estimates as of December 2015.

(2) International Data Corporation (IDC) Worldwide Quarterly Wearable Device Tracker, https://www.idc.com/getdoc.jsp?containerId=prUS40846515

(3) David Bolton, "Why 2016 Will Be the Year of the Wearable," http://arc.applause.com/2015/12/12/wearables-mass-adoption-2016-forrester/