AOT Software Platform ETF (AOTS)

Overview

AOTS is a specialized index that tracks companies recognized as software-driven enterprises, focusing on their reliance on software platforms and their revenue generation from software-related activities. To qualify for inclusion in this index, a company must derive at least 20% of its revenue from software activities such as cloud infrastructure, enterprise software, development tools, analytics and AI, middleware, or specific industry solutions. Furthermore, companies must demonstrate a positive Earnings to Price ratio. The selection process emphasizes multiple financial factors, including the average rank derived from a combination of cost of goods sold to revenue, earnings to price, and return on invested capital, along with the overall market capitalization. The index highlights the top 50 firms based on these rankings and retains a 10-company buffer for incumbents. Notably, the weighting system prioritizes companies with over 50% software revenue, capping those with less at 20%. The weights are refined to be float-adjusted with constraints ensuring that no single company exceeds a maximum weight of 7.5%, while also ensuring that no company holds less than 0.5%. An aggregate constraint mandates that companies exceeding 5% in weight collectively remain under 45%. The reconstitution and rebalancing of the index occur quarterly on the third Friday of March, June, September, and December.

Products and Services

• Index Tracking: AOTS provides a comprehensive index that captures the performance of leading software-driven companies, making it a valuable reference for investors interested in the software sector.

• Qualitative Analysis: The selection methodology is based on a robust qualitative analysis that evaluates potential index candidates against key financial ratios and benchmarks, ensuring the inclusion of economically sound enterprises.

• Weighting Methodology: The index employs a sophisticated weighting system that prioritizes companies with significant software revenue, thereby representing a strong focus on the most impactful software enterprises in the market.

• Reconstitution and Rebalancing Services: AOTS provides a structured timetable for the reconstitution and rebalancing of the index, ensuring alignment with the latest market conditions and maintaining the integrity of the index.

• Investment Insights: Beyond simply tracking index performance, AOTS offers insights and analytical tools designed to assist investors in making well-informed investment decisions based on current market dynamics.

• Data Transparency: AOTS commits to maintaining transparency in its data, allowing stakeholders to access relevant index metrics and understand the underlying factors that influence the index's performance.