Global X lists AI and big data ETFGlobal X, the thematic ETF specialist that was recently acquired by Mirae, is listing a new big data and AI ETF. The Global X Future Analytics Tech ETF (AIQ) will track companies that are likely to "benefit from the further development and [use] of artificial intelligence ‚Ä¶ [and] provide hardware which facilitates the use of artificial intelligence for the analysis of big data," the prospectus says.
To be chosen in the index, companies must have a market cap of $500 million and be listed in a developed country or China. AIQ then puts companies in one of two categories:
- AI and big data developers. This includes companies that build AI, companies in big data and companies in cloud computing.
- AI and big data hardware companies. This includes companies that make semiconductors, memory chips, graphics cards, and other computer hardware. It may also include quantum computing, the prospectus indicates.
Companies are then ranked on how well they fit in these categories, with only the most highly ranked being included. The index will be weighted by market cap.
Analysis - a three legged tech ETFWhen Amplify listed its blockchain ETF (BLOK) some critics suggested it was just a high-priced tech ETF. BLOK's stock selection method for blockchain companies was very broad, and allowed companies that had merely expressed an interest in blockchain to be included in its index. It even allowed companies that were partnered with another company that had expressed interest in blockchain to be included in the index. Eventually, Amplify met its critics halfway and renamed BLOK the "Amplify Transformational Data Sharing ETF".
One wonders if something similar is happening here with AIQ. Only a very stretched definition of "artificial intelligence" would include graphics cards and semiconductor manufacturers. And when the investment strategy laid out in the prospectus suggests its open to investing in quantum computing (when - if ever - it's commercially viable; when - if ever - it exists) something smells a bit off.
Global X has had more sensitive antennae than almost any ETF issuer for what the retail market in the US will gobble up. They've seen success with BOTZ and LIT based on a brilliant reading of the retail zeitgeist. Yet with AIQ, can they convince investors that this is really an AI fund?
WisdomTree lists CoCo bond and put-write ETFsWisdomTree is listing two new ETFs that promise to add colour to the European alternative ETF space. They are:
- WisdomTree AT1 CoCo Bond UCITS ETF (COCB, CCBO)
- WisdomTree CBOE S&P 500 PutWrite UCITS ETF (PUTW, PUTS)
PUTW exists already in the US under the same ticker, where it has $203m assets under management. It tracks an S&P 500 index that builds in an options strategy. PUTW employs an options strategy which includes, on a monthly basis, selling (or "writing") at-the-money S&P 500 put options and investing the proceeds from that sale in US treasury bills. For assuming the risk of market losses through the put positions, the ETF earns a 'volatility risk premium' which can diversify investors' sources of return and reduce the volatility of equity returns in portfolios.