The BITA Remote Economy Giants Index (BREEGI) is designed to track the performance of a fixed basket of stocks of companies that derive at least 80% of their revenues by providing services, such as videoconferencing, online food delivery services, online gaming, telemedicine, entertainment streaming services, and E- retailing. As the world sought ways to confront the worst public health pandemic in a century, with the explosion of the coronavirus worldwide, routines and lifestyles of populations across the world had to embrace the remote management of various activities. BREEGI provides exposure to companies that provide various technologies designed to enhance remote services.
The index was launched on the 10th of April 2020 by BITA, a German-based investment technology company, which also maintains the index. Remote Economy Giants Index launched with a value of 1000 at inception. As a bundle of companies that stood to benefit as the COVID-19-induced remote economy took off, BREEGI enjoyed positive investor sentiment and rallied steadily throughout 2020 and into 2021. It printed an all-time high at above 2000 by February 2021, before a retracement was triggered to just above 1500 by March 2021. It, however, demonstrated resilience and climbed to above 1700 in April 2021.
Remote Economy Index Composition and Calculation
BREEGI is a free-float market capitalisation-weighted index calculated using the standard Laspeyres formula. A free float index considers only outstanding shares held by the public, and it is market capitalisation that influences the respective weight of each constituent. The index has a capping factor of 10%, and any excess weight is distributed proportionally among all constituents until such a time when that condition is achieved. The capping factor in indices helps to limit the weight of any one individual constituent. A unique and variable divisor is applied in the computation of BREEGI so that its price maintains continuity across corporate actions such as mergers, takeovers, and spinoffs. The index is calculated up to 13 decimal places for accuracy purposes but is rounded off to 2 decimal places for publishing, storage, and dissemination purposes.
Remote Economy Giants Index has 20 fixed constituents. The companies must meet the following conditions:
- They have a primary listing on a recognised stock exchange in the US, having met all the strict conditions.
- They derive at least 80% of their revenues by providing services such as videoconferencing, online food delivery services, online gaming, telemedicine, entertainment streaming services, and E- retailing.
The Remote Economy Index is rebalanced quarterly on the third Friday of March, June, September, and December, at the close of business. The ‘Proforma Day’ for ordinary adjustments is the Monday that precedes the third Friday of the rebalancing month.
Here are the top 10 constituents of the BREEGI index as of April 2021:
|Zoom Video Communications A||9.85%|
Factors Influencing the Price of Remote Economy Giants Index
The remote economy was always the plan for the future, but the coronavirus pandemic helped accelerate its implementation. There were already companies working towards building remote solutions for the future, and the global pandemic provided the much-needed platform to execute at scale. Populations across the world had to shift behaviour, and companies that created technologies that made this shift as convenient as possible reaped huge rewards. While there was always going to be this shift in the future, the pandemic ensured that potential future profits were earned beforehand. The remote economy can only get better, and it is expected that BREEGI constituents will be at the forefront of this new era.
In 2020, Remote Economy Giants Index benefitted from tough restrictions that kept populations indoors. Demand for various remote services increased dramatically. However, as of February 2021, the rollout of vaccines globally meant that a return to the ‘old norm’ was a distinct possibility. As a result of this, the demand for various remote services is likely to stagnate. But this is a long-term fundamental headwind that has no timeline. With the remote economy still very much in its infancy stages, it means that innovation will remain the key driver of revenues for these companies. Hit innovative products are capable of dramatically increasing the fortunes of these companies, whereas misses can drastically shift investor sentiment. Additionally, factors such as interest rates, legislation, and overall economic conditions could also impact the price of the Remote Economy Index.
Why Trade BREEGI
BREEGI is made up of a fixed basket of 20 of the largest companies exposed to the remote economy. This makes the index highly liquid, which means it can be traded with transparent prices and competitive transaction costs at practically all times.
- Stable Price Action.
Remote Economy Giants Index has a stable price behaviour that is easily predictable, except in abnormal or crisis situations in the market.
- Vast News Coverage.
BREEGI is the benchmark stock index for companies exposed to the remote economy. These companies have enjoyed vast news coverage, particularly during the coronavirus pandemic period.
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