Industry Updates

Global X raises single stock limit in AI ETF amid Nvidia boom

Changes reflect the dominance of Nvidia

Lauren Gibbons

Rob oliver article-image

Global X has increased the top holding limit in its robotics and AI ETF as Nvidia’s share price continues to skyrocket.

In a shareholder notice, the firm said the Global X Robotics & Artificial Intelligence ETF (BOTZ) will see the limit for a single holding increase from 20% to 35% under “exceptional market conditions”.

BOTZ, which tracks the Indxx Global Robotics & Artificial Intelligence Thematic index, offers exposure to 42 companies, however, the top four holdings currently account for 47.2% of the index.

The top holding, Nvidia, has a 21.2% weighting for BOTZ, followed by Intuitive Surgical (10.7%), ABB (8.6%) and Keyence (6.7%), as at 26 February.

Rob Oliver, head of business development at Global X, said: "With the performance of Nvidia relative to peers, the stock was close to 20% and thus, Global X applied to the Central Bank of Ireland (CBI) to add the ability to raise this limit to 35% in exceptional market conditions which may include the dominance of a particular issuer in the relevant market."

Nvidia has seen its shares quadruple in value since the launch of ChatGPT in November 2022, aiding the performance of ETFs with Nvidia weightings.

The tech giant saw stronger-than-expected Q4 2023 earnings last week, with revenues for the chipmaker rising to $22.1bn, $1.7bn ahead of expectations.

BOTZ has returned 103.9% since inception in 2016, with its most dramatic rise occurring in 2023 after Nvidia hit a $1trn market cap in May after posting $7.2bn of sales.

Other news from the ETF issuer came last week when it appointed Ryan O'Connor as CEO from Goldman Sachs Asset Management, replacing Luis Berruga who departed last November.

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