Automation & AI ETFs
Algo Chain
Leveraging AI & Data Science to deliver top quartile portfolios for the Wealth Management industry
Not a day goes by without the words AI and automation being used in every headline and product description (editor’s note: present company excepted!).? Consequently, it is hard to guess what’s going on within an ETF unless one digs a little deeper. This is particularly true of ETFs tracking an index that covers companies that make their profits from the Automation & AI sector. If so which sectors, and for which geographies, and what types of firms? Do they make a large amount of their revenues from those themes or just half or even less?? The list of questions seems endless.
This category of ETFs is not to be confused with the much smaller set of funds that use AI & Machine Learning Models to select stocks with the aim of delivering outperformance – although one can’t always judge just by their names. Conceptually the very nature of active AI & Machine Learning ETFs is very different from those ETFs that track an AI and automation theme. ?During the first half of 2024, the inclusion of Nvidia in an index has tended to distort its performance, so it’s always a good habit taking a look at the top 10 holdings to see which stocks the ETF includes.
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In the end, all an investor can do is to try and construct a portfolio that is diversified and doesn’t contain too much hidden concentration risk. Much like the greenwashing era when many indices seem to contain so many of the familiar names, so it is with AI themed indices. With so many ETFs to choose, it quickly becomes a tedious task getting to grips with all of that detail.
At Algo-Chain we have developed an ETF Playlist Dashboard that makes it easy to get a high-level overview of a particular segment of the ETF ecosystem. Use link above to keep track of how these Automation & AI themed ETFs are performing on a relative basis.
Until next time
领英推荐
Allan Lane
P.S.
Algo-Chain offers a White Label Solution that is designed for Wealth Managers that look to offer their own Model Portfolios to their clients. As fees come under pressure and firms look to take control of a larger share of the value chain, there's never been a better time to leverage the power that AI assisted technology can bring to the table.