“The software industry plays an important role in our daily lives and these companies represent some of the most exciting business models of the future,” said Som Seif, founder and CEO of Purpose Investments. “The global pandemic has accelerated the growth of the sector as companies have been forced to turn around and continue embracing digitization, and we believe these trends will have long-term implications.”
SOFT tracks the Solactive Purpose Enterprise Software ESG Screened Index NTR (SOFTWARN), the performance of which has resulted in a return of 50.28% over the past 12 months; in the past five years it has risen 473.27%. The fund will also have a total expense ratio of 0.59%.
Nicholas Mersch, Portfolio Manager at Purpose Investments, highlighted numerous strengths of 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 a company that doesn’t see itself as a technology company has to buy, become, or lag behind a product,” said Nicholas Mersch, portfolio manager at Purpose Investments. “Software makes this possible, which is why we are particularly pleased about SOFT’s SaaS focus.”
In line with Purpose’s practice of embedding ESG in its investment processes, SOFT also filters out companies exposed to controversial weapons and fossil fuels.