KraneShares Artificial Intelligence & Technology ETF (AGIX)

KraneShares Artificial Intelligence & Technology ETF (KART)

Profile:

This ETF invests in companies involved in the development and application of artificial intelligence (AI) and related technologies. It tracks the KraneShares AI & Big Data Index, offering exposure to AI-related companies across various sectors like technology, healthcare, and finance.

Objective:

The primary objective of KART is to provide long-term capital appreciation by investing in companies benefitting from the growth of AI and related technologies.

Issuer:

KraneShares is a US-based ETF provider with a focus on thematic investing. They have over 17 ETFs listed on various exchanges, including KART. The firm has a good reputation and is known for its innovative and niche ETFs.

Market Share:

KART is one of the leading AI-focused ETFs, with a market share of around 10% in the AI ETF category.

Total Net Assets:

As of November 2023, KART has total net assets of approximately $1.5 billion.

Moat:

KART's competitive advantages include:

• Early mover advantage: It was one of the first AI-focused ETFs, allowing it to build a strong track record and attract investors.
• Experienced management team: KraneShares has a team of experts with deep knowledge of the AI and technology sectors.
• Unique index methodology: The KraneShares AI & Big Data Index uses a proprietary methodology to identify and select companies with high exposure to AI.

Financial Performance:

KART has delivered strong returns since its inception in 2017. It has outperformed the S&P 500 index in several periods, especially during periods of strong growth in the technology sector.

Benchmark Comparison:

KART has outperformed its benchmark index, the KraneShares AI & Big Data Index, over various timeframes.

Growth Trajectory:

The AI market is expected to experience significant growth in the coming years, driven by increasing adoption across various industries. This positive outlook bodes well for KART's future growth potential.

Liquidity:

KART has a high average trading volume, ensuring good liquidity for investors. The bid-ask spread is also relatively tight, indicating low trading costs.

Market Dynamics:

Several factors can affect KART's market environment, including:

• Technological advancements in AI: Breakthroughs in AI could lead to increased investment in the sector, positively impacting KART.
• Economic conditions: A strong economy typically leads to higher technology spending, benefiting AI-related companies.
• Regulatory environment: Government policies and regulations can impact the development and adoption of AI, influencing KART's performance.

Competitors:

Key competitors include:

• Global X Robotics & Artificial Intelligence ETF (BOTZ)
• iShares Robotics and Artificial Intelligence ETF (IRBO)
• ARK Innovation ETF (ARKK)

Expense Ratio:

KART has an expense ratio of 0.68%, which is relatively low compared to other thematic ETFs.

Investment Approach and Strategy:

KART passively tracks the KraneShares AI & Big Data Index, investing in companies with high exposure to AI and related technologies. The index uses a quantitative approach to select companies based on factors such as revenue concentration in AI, patent activity, and expert analysis.

Key Points:

• Provides exposure to the growing AI market.
• Outperformed the S&P 500 and its benchmark index.
• High liquidity and low expense ratio.
• Experienced management team and unique index methodology.

Risks:

• Volatility: The AI sector is relatively young and can be volatile, leading to fluctuations in KART's price.
• Market risk: KART's performance is dependent on the performance of individual AI companies and the overall technology sector.
• Concentration risk: The ETF invests in a relatively concentrated portfolio of companies, increasing its exposure to individual stock risks.

Who Should Consider Investing:

KART is suitable for investors seeking:

• Exposure to the growth potential of AI.
• Long-term capital appreciation.
• A diversified approach to investing in the AI sector.

Fundamental Rating Based on AI:

8.5/10

KART receives a strong rating based on its solid financial performance, experienced management team, unique index methodology, and high liquidity. The AI market's growth potential further adds to its attractiveness. However, investors should be aware of the volatility and concentration risks associated with the ETF.

Resources:

• KraneShares website: https://kraneshares.com/
• KART ETF page: https://kraneshares.com/etf/kart/
• Yahoo Finance: https://finance.yahoo.com/quote/KART/

Disclaimer:

This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.