February Update - Tematica Select Digital Infrastructure Model (DIGI)

Key Takeaways

• Model adds edge‑computing and submarine‑cable firms
• Fiber and data‑center weights increased substantially
• ESG screening tightened across all holdings
• Revenue growth metric linked to global traffic
• Focus on companies enabling 5G rollout

Summary

On March 3, 2026 Tematica released its February update to the Select Digital Infrastructure (DIGI) model, which tracks firms that build and operate the backbone of the hyper‑connected economy. The revision expands the universe to include edge‑computing, 5G tower, and submarine‑cable operators, while tightening ESG screening criteria. Weightings were adjusted to give greater exposure to fiber‑optic and data‑center providers, reflecting accelerating demand for bandwidth. The model now incorporates a forward‑looking revenue growth metric tied to global data traffic forecasts.

Pulse Analysis

Digital infrastructure has become the silent engine of modern economies, powering everything from cloud services to remote work. As global data traffic is projected to double by 2030, investors are scrambling for assets that can scale bandwidth efficiently. The DIGI model’s inclusion of edge‑computing providers captures the shift toward low‑latency processing near end‑users, while the addition of submarine‑cable operators reflects the critical need for resilient international connectivity. By broadening its scope, the model mirrors the sector’s evolving architecture and offers a clearer lens on where capital can generate sustainable growth.

The February update also marks a strategic pivot toward tighter environmental, social, and governance (ESG) standards. Companies now must meet stricter carbon‑intensity thresholds and demonstrate transparent supply‑chain practices. This move responds to heightened regulator and stakeholder scrutiny, ensuring that the model’s constituents are not only financially robust but also aligned with long‑term sustainability goals. For portfolio managers, the enhanced ESG filter reduces exposure to firms facing potential regulatory penalties or reputational risk, thereby improving the risk‑adjusted profile of the DIGI allocation.

From an investment standpoint, the revised weightings signal a bullish outlook on fiber‑optic networks and hyperscale data centers, sectors that are benefitting from surging demand for video streaming, AI workloads, and IoT connectivity. By tying a forward‑looking revenue growth metric to global traffic forecasts, the model provides a quantitative edge, helping investors differentiate high‑growth operators from laggards. Consequently, the DIGI update equips asset managers with a more granular, forward‑focused tool to capture upside in the digital infrastructure landscape while managing exposure to emerging ESG and market dynamics.