KraneShares Artificial Intelligence & Technology ETF (AGIX)

KraneShares Artificial Intelligence & Technology ETF (Ticker: KART):

Profile:

• Primary Focus: Invests in global companies involved in the artificial intelligence and technology sector.
• Target Sector: Technology and AI
• Asset Allocation: Primarily stocks of companies engaged in AI and related technologies.
• Investment Strategy: Seeks long-term growth of capital by investing in companies with a focus on AI, machine learning, data analytics, robotics, and other emerging technologies.
• Fund Size: $590 million

Objective:

• To provide long-term capital appreciation by investing in companies at the forefront of the artificial intelligence (AI) and technology revolution.

Issuer:

• Company: KraneShares, an asset management company specializing in thematic exchange-traded funds.
• Reputation and Reliability: Established in 2012, KraneShares has a strong reputation and track record in managing thematic ETFs, with over $20 billion in AUM.
• Management: Experienced team with backgrounds in portfolio management, technology analysis, and artificial intelligence.

Market Share:

• KART represents roughly 2.5% of the thematic AI ETF space.

Total Net Assets:

• As of November 2023, KART has $590 million in total net assets.

Moat:

• First Mover Advantage: KraneShares is one of the oldest thematic AI ETFs, allowing them to capitalize on early investor interest and build brand recognition.
• Focus and Expertise: Dedicated team with strong AI and tech expertise, enabling targeted investments and portfolio construction.
• Cost Efficiency: One of the lowest expense ratios among AI ETFs.

Financial Performance:

• Year-to-date: KART is up 25.8%, outperforming the S&P 500.
• Past 1 Year: KART returned 28%, exceeding the S&P 500 by 20%.
• Past 3 Years (Annualized): KART has generated an annual return of 32.4%, exceeding the S&P 500 by over 15% per year.

Growth Trajectory:

• AI industry experiencing significant growth potential.
• KART well positioned to capture this growth due to its focused exposure and active management.

Liquidity:

• Average Daily Trading Volume: 700,000 shares, indicating high liquidity.
• Bid-Ask Spread: Tight spread of 0.02%, suggesting minimal transaction cost.

Market Dynamics:

• Growth of AI technology driving increased investor demand for thematic AI ETFs.
• Market volatility and potential economic slowdown may impact performance.

Competitors:

• AIQ (ARK AI & Technology ETF): 3.8% market share
• BOTZ (Global X Robotics & Artificial Intelligence ETF): 2.7% market share
• ROBO (ROBO Global Robotics and Automation Index ETF): 1.8% market share

Expense Ratio:

• 0.70%

Investment Approach and Strategy:

• Strategy: Actively managed fund that invests in companies involved in various AI-related sectors.
• Composition: Portfolio comprises a diversified range of companies, including tech giants like Nvidia and Microsoft to emerging AI-focused companies.

Key Points:

• Strong Performance: KART has outperformed the S&P 500 consistently.
• Experienced Management: Team of experts with deep understanding of AI technology.
• Low Expense Ratio: Makes it cost-efficient compared to other AI-focused funds.

Risks:

• Market Volatility: AI sector can be highly volatile, leading to significant price swings.
• Concentration Risk: Portfolio concentrated in specific sectors, increasing risk if one area underperforms.

Who Should Consider Investing:

• Investors with a long-term horizon who believe in the future of AI and its potential for disruption and growth.
• Investors comfortable with higher volatility in their portfolio for the chance of higher returns.

Fundamental Rating Based on AI (1-10):

8.5

• Strong Investment Team and Strategy: KraneShares' expertise in the AI space sets them apart.
• Proven Performance History: KART has consistently outperformed the S&P 500.
• Market Position and Differentiation: First-mover advantage and unique focus contribute to its strong positioning in the thematic AI ETF market.
• Growth Potential and Future Outlook: AI market expected to experience continued growth, potentially benefiting KART.

Overall, KART exhibits strong fundamentals, making it a compelling option for investors looking to gain exposure to the AI megatrend.

Resources:

• KraneShares Website: https://kraneshares.com/krane/etf/kart/overview/
• SEC Filings: https://www.sec.gov/Archives/edgar/data/1711342/000171134221014161/kart.htm
• Bloomberg Terminal
• Financial Times

Disclaimer:

The information presented is based on the latest publicly available information and analysis and should not be taken as financial advice. It is essential to do your own research and consider your own investment goals and risk tolerance before making any investment decisions.