This Tech Fund Provides Exposure to Artificial Intelligence

The question of how the use of artificial intelligence (AI) will affect daily life has yet to be thoroughly answered.

While politicians have yet to enact policies that aim to cushion the deleterious effects of AI that include the loss of employment in certain sectors in the economy, artificial intelligence still provides ample opportunities for investors. The Global X Future Analytics Tech ETF (NASDAQ: AIQ) is an exchange-traded fund (ETF) that can give a prospective investor access to this dynamic part of the global economy.

Specifically, AIQ tracks a market-cap-weighted index of developed-market equities from companies that are involved with artificial intelligence and big data. The companies that make up the AIQ portfolio mainly use artificial intelligence to analyze big data for their own operations or for other companies. Those holdings are selected by AIQ’s managers, based on a composite analysis of public filings, products and services, official company statements and other information.

Some of this fund’s top holdings include Qualcomm Inc. (NASDAQ: QCOM), Facebook, Inc. Class A (NASDAQ: FB), Microsoft (NASDAQ: MSFT), Adobe Inc. (NASDAQ: ADBE), Amazon Inc. (NASDAQ: AMZN), Service Now Inc. (NYSE: NOW), Netflix, Inc. (NASDAQ: NFLX) and the Raytheon Company (NYSE: RTN).

While these companies are mainly in the software & IT services sector, encompassing 60.73% of the fund’s total composition, this ETF has holdings in companies that are in the semiconductors & semiconductor equipment, 14.28%; aerospace & defense, 5.20%; industrial conglomerates, 3.81%; and professional & commercial services, 3.63%.

The fund currently has $41 million in assets under management and an average spread of 0.38%. It also has an expense ratio of 0.68%, meaning that it is more expensive to hold in comparison to other exchange-traded funds.

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In terms of AIQ’s MSCI ESG Fund Quality Score of 5.69, it ranks in the 56^th percentile within its peer group and in the 56^th percentile within the global universe of all funds in the MSCI ESG Fund Metrics coverage.

This fund’s performance has been mixed in the long term. While it only has been down 8.02% over the past month, it rose 1.07% over the past three months and remains up 20.37% year to date.

Chart Courtesy of stockcharts.com

In short, while AIQ does provide an investor with the ability to profit from the world of artificial intelligence, the sector may not be appropriate for all portfolios. Thus, interested investors always should do their due diligence and decide whether the fund is suitable for their investing goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.