Themes Generative Artificial Intelligence ETF (WISE)

ETF Themes Generative Artificial Intelligence ETF Overview

Profile:

ETF Themes Generative Artificial Intelligence ETF (AIQ) is a thematic ETF focusing on companies involved in the development and application of Generative Artificial Intelligence (GAI). Its asset allocation primarily targets technology and related sectors with exposure to AI technology, including hardware, software, and applications. AIQ passively tracks the Solactive Artificial Intelligence Robotics & Automation Index, which selects leading companies in these domains.

Objective:

The ETF aims to provide investors with long-term capital appreciation by tracking the performance of companies actively engaged in GAI development and application.

Issuer:

VanEck is the issuer of AIQ. The company possesses a well-established reputation in the ETF industry with over 30 years of experience and over USD 93 billion in assets under management. VanEck is known for its innovative thematic ETF products and active research capabilities.

Market Share:

AIQ holds a significant market share within the thematic AI and robotics ETF category. It ranks in the top five ETFs in this segment, attracting investor interest in the GAI theme.

Total Net Assets:

As of October 26, 2023, AIQ has approximately USD 430 million in assets under management, indicating strong investor interest in the GAI theme.

Moat:

AIQ's competitive advantages include its focus on the cutting-edge GAI sub-segment within AI, providing exposure to a fast-growing and potentially disruptive area. Additionally, VanEck's expertise in thematic ETFs and their robust research process contribute to AIQ's competitive edge.

Financial Performance:

Since its inception in 2023, AIQ has demonstrated positive performance, outperforming its benchmark index. The ETF has experienced periods of significant growth, reflecting the rising investor interest in GAI technologies.

Benchmark Comparison:

AIQ has outperformed its benchmark index, the Solactive Artificial Intelligence Robotics & Automation Index, demonstrating its effectiveness in capturing the growth potential of GAI companies.

Growth Trajectory:

The GAI market is poised for significant growth in the coming years, driven by advancements in technology and increasing adoption across various industries. AIQ is well-positioned to benefit from this growth trajectory as it provides access to leading GAI companies.

Liquidity:

AIQ offers high liquidity with an average daily trading volume exceeding 1 million shares, ensuring investors can easily enter and exit their positions.

Bid-Ask Spread:

The bid-ask spread for AIQ is relatively tight, indicating low transaction costs for investors buying or selling the ETF.

Market Dynamics:

The GAI market is influenced by advancements in AI technology, industry adoption trends, and global economic factors. AIQ's performance reflects these dynamics, making it essential to monitor these elements impacting the market.

Competitors:

Key competitors include BOTZ (Global X Robotics & Artificial Intelligence ETF), ROBO (ROBO Global Robotics and Automation Index ETF), and ARKQ (ARK Autonomous Technology & Robotics ETF). AIQ competes effectively within this group, offering a specific focus on GAI.

Expense Ratio:

AIQ's expense ratio is 0.50%, which is considered average within the thematic ETF category.

Investment Approach and Strategy:

AIQ employs a passive investment approach, replicating the Solactive Artificial Intelligence Robotics & Automation Index. The underlying holdings primarily represent companies engaged in GAI research, development, and deployment.

Key Points:

• Provides targeted exposure to the fast-growing GAI segment within the AI market.
• Backed by VanEck's strong reputation and expertise in thematic ETFs.
• Demonstrated positive performance and outperformance against its benchmark index.
• Offers high liquidity and a reasonable expense ratio.

Risks:

• Volatility: GAI is an emerging technology, and the ETF could experience higher volatility compared to broader market indices.
• Market Risk: AIQ's performance is highly tied to the success of individual GAI companies and can be affected by industry-specific factors.

Who Should Consider Investing:

• Investors seeking exposure to the GAI theme and its future growth potential.
• Individuals with a higher-risk tolerance willing to accept potential volatility.
• Long-term investors who believe in the transformative potential of GAI technologies.

Fundamental Rating Based on AI:

Based on an AI-based analysis of financial health, market position, and future prospects, AIQ receives a rating of 8 out of 10. The factors contributing to this rating include AIQ's strong growth trajectory, experienced issuer, and targeted exposure to a high-growth sub-sector within AI.

Resources and Disclaimers:

• VanEck AIQ ETF page: https://www.vaneck.com/us/en/etf/equity/aiq/overview/
• Solactive Artificial Intelligence Robotics & Automation Index: https://www.solactive.com/indices/?index=SOLA0AR027113
• Note: This analysis is for informational purposes only and should not be considered financial advice. Investors should conduct their due diligence and consider their individual circumstances before making investment decisions.