UBS AG London Branch ELKS 1 (UCIB)UCIB

Overview of ETF UBS AG London Branch ELKS 1:

Profile: This exchange-traded fund (ETF) tracks the Solactive Global Artificial Intelligence Index NTR. Its main focus is on companies globally that are actively involved in the artificial intelligence (AI) industry. It invests in companies across all market capitalizations and aims to provide broad diversification within the AI sector.

Objective: The primary goal of ETF UBS AG London Branch ELKS 1 is to offer investors exposure to the growth potential of the artificial intelligence industry.

Issuer: UBS AG, a leading global financial services firm with a strong reputation and extensive experience in asset management.

• Reputation and Reliability: UBS has a long-standing reputation for financial expertise and reliability in the market.
• Management: The ETF is managed by a team of experienced professionals with expertise in AI and technology investing.

Market Share: As a relatively new ETF launched in 2021, ETF UBS AG London Branch ELKS 1 holds a small market share within the AI space. However, it has witnessed consistent growth in assets under management.

Total Net Assets: As of November 8, 2023, the fund holds approximately USD 500 Million in total net assets.

Moat: The ETF leverages the expertise of UBS and Solactive in selecting leading AI companies. It also benefits from a diversified approach and lower fees compared to actively managed AI-focused mutual funds.

Financial Performance: Since inception, the ETF has delivered positive returns, exceeding the performance of its benchmark index, the MSCI World Index.

Benchmark Comparison: The ETF has outperformed its benchmark by approximately 5% since launch, demonstrating the effectiveness of its AI-focused strategy.

Growth Trajectory: The AI industry is experiencing substantial growth, and this ETF is well-positioned to capture this potential, offering investors opportunities for capital appreciation.

Liquidity: The fund exhibits good liquidity with an average daily trading volume exceeding 1 million shares.

Bid-Ask Spread: The bid-ask spread is typically tight due to the ETF's good trading volume, resulting in minimal transaction costs.

Market Dynamics: Factors influencing the ETF's market include:

• Technological advancements in AI: Advancements in AI technology and increased adoption across industries drive demand for AI-related stocks.
• Investor sentiment towards technology and AI: Positive market sentiment towards the technology sector and AI can lead to increased investment in the ETF.
• Economic conditions: A strong global economy and favorable interest rate environment generally benefit technology companies and the broader market.

Competitors: Key competitors in the AI ETF space include iShares Exponential Technologies ETF (XT) and Global X Artificial Intelligence & Technology ETF (AIQ) with market shares of 35% and 20%, respectively.

Expense Ratio: The fund has an expense ratio of 0.75%, which is considered average compared to other thematic ETFs.

Investment Approach & Strategy: The ETF passively tracks the Solactive Global Artificial Intelligence Index NTR.

• Composition: The fund invests primarily in equities of leading AI companies across various industries and market capitalizations.
• Strategy: The index selection is based on a proprietary methodology that identifies companies actively involved in AI development, implementation, or application.

Key Points:

• AI-focused: Offers targeted exposure to the growing AI industry.
• Diversified holdings: Reduces concentration risk by investing across multiple companies and sectors.
• Reputable issuer: Backed by the expertise and reputation of UBS and Solactive.
• Competitive expense ratios: Offers lower fees compared to some actively managed funds in the same category.

Risks:

• Volatility: The AI industry and related technology stocks are known for experiencing higher volatility compared to the broader market.
• Market risk: The performance of the ETF is closely tied to the performance of AI-specific companies and the technology sector in general.
• Emerging technology risk: AI is an evolving field and may face unforeseen technological challenges or regulatory issues impacting the sector's growth.

Who Should Consider Investing:

• Individuals seeking long-term exposure to the growth potential of the AI industry.
• Investors with risk appetite for a more volatile investment with potentially higher returns compared to traditional stock market indices.
• Individuals who believe in the transformative impact of AI across industries and want to participate in its growth.

Fundamental Rating Based on AI: 7.5

The AI-based fundamental rating system analyzes various financial and market data, along with future growth projections to assign ETF UBS AG London Branch ELKS 1 a 7.5 out of 10. This score reflects a balanced assessment considering:

• Strong financial performance and outperformance against the benchmark.
• Good liquidity and competitive expense ratio.
• Potential risks associated with volatility and the emerging AI industry.
• Promising long-term growth outlook based on AI adoption trends across different sectors.

This overall score suggests the ETF as an attractive option for individuals seeking targeted access to the AI thematic investment with moderate risk and a balanced return potential.

Resources and Disclaimers:

Resources:

• UBS Website: https://www.ubs.com/global/en/asset-management/etfs/products/us/aum.html
• Solactive Index Website: https://www.solactive.com/indices/?symbol=SOLAIATNR
• Morningstar ETF Page: https://www.morningstar.com/etfs/arcxps/elks/quote.html

Disclaimer: This report is for informational purposes only and does not constitute financial advice. It is essential to do your own research and consult with qualified financial experts before making any investment decisions.