Market Overview

New Defiance Future Tech ETF Invests In Virtual, Augmented Reality

New Defiance Future Tech ETF Invests In Virtual, Augmented Reality

An exchange traded fund dedicated to the augmented and virtual reality investment themes is here. The Defiance Future Tech ETF (NYSE: AUGR) debuted Wednesday courtesy of upstart issuer Defiance ETFs.

The Defiance Future Tech ETF is the first ETF from New York-based Defiance.

What Happened

AUGR tracks the BlueStar Augmented and Virtual Reality Index. BlueStar indexes are used by well-known ETFs including the VanEck Vectors Israel ETF (NYSE: ISRA) and the BlueStar Israel Technology ETF (NYSE: ITEQ).

“Augmented reality — digital images superimposed over the real world — is primed to drive industry growth. In fact, companies are already putting the technology to use in a variety of ways from AR-enabled real estate tours to training workers in manufacturing,” according to Defiance ETFs.

Why It's Important

Components in AUGR's underlying index must have exposure to the gaming systems and video game industries, artificial intelligence, cloud computing or displays including holographic and adaptive interfaces. The index is equally weighted.

“AUGR offers a liquid and transparent way to invest in companies developing and commercializing the AR/VR technology from application developers to manufacturers and distributors of the necessary hardware,” according to Defiance ETFs.

AUGR is a global ETF with exposure to 10 countries, but the U.S. dominates the fund's geographic allocations at over 63 percent. Japan and France combine for about 21 percent, according to issuer data. Three of AUGR's country exposures — China, South Korea and Taiwan — are classified as emerging markets.

Seven of the ETF's top 10 holdings are U.S.-listed stocks. That group includes Walt Disney Co. (NYSE: DIS) and Snap Inc. (NYSE: SNAP).

What's Next

Interface and design companies account for over 36 percent of AUGR's weight, while virtual reality gaming and AI companies combine for nearly a third of the new ETF's roster.

AUGR charges 0.65 percent per year, or $65 on a $10,000 investment.

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