Global X, begun trading a new Artificial Intelligence and Big Data ETF, the Global X Future Analytics Tech ETF (NASDAQ: AIQ) on Tuesday, May 15, 2018. Here is a synopsis of the new ETF:
FUND INFORMATION:
| Symbol: AIQ | Exchange: Nasdaq |
| Name: Global X Future Analytics Tech ETF | Net Expense Ratio: 0.68% |
FUND OBJECTIVE:
The Global X Future Analytics Tech ETF seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Artificial Intelligence & Big Data Index.
REFERENCE INDEX:
The Indxx Artificial Intelligence & Big Data Index is designed to provide exposure to exchange-listed companies that are positioned to benefit from the further development and utilization of artificial intelligence technology in their products and services, as well as to companies that provide hardware which facilitates the use of artificial intelligence for the analysis of big data, as defined by Indxx, the provider of the Underlying Index.
As technology continues to advance, artificial intelligence and big data are converging as complementary technology themes that enable companies to extract useful information from large and complex data sets. The increasing availability and accessibility of big data is creating more potential applications for artificial intelligence technology, which further incentivizes companies to develop capabilities in this area. Advances in artificial intelligence and big data technology have the potential to impact companies across many sectors, and are particularly applicable to companies that have acquired significant amounts of consumer, industrial, financial or other types of data.
The eligible universe of the Underlying Index includes exchange-listed companies that meet minimum market capitalization and liquidity criteria, as defined by the Index Provider. As of April 2, 2018, companies must have a minimum market capitalization of $500 million and a minimum average daily turnover for the last 6 months greater than or equal to $2 million in order to be eligible for inclusion in the Underlying Index. As of April 2, 2018, companies listed or incorporated in the following countries were eligible for inclusion in the Underlying Index: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, South Korea, Spain, Sweden, Switzerland, Taiwan, the United Kingdom, and the United States. In addition, ADRs and GDRs of companies incorporated or with primary listing in China are eligible for inclusion.
From the eligible universe, the Index Provider identifies Artificial Intelligence & Big Data Companies by applying a proprietary analysis that seeks
to identify companies that can be classified in one of the following categories:
* Artificial Intelligence Developers
* Artificial Intelligence Applied to Products and Services – Companies that have developed internal artificial intelligence capabilities (organically or through acquisition) and are applying artificial intelligence technology directly in their products and services. Artificial intelligence applications include but are not limited to language/image processing and recognition, automated communications, threat detection, recommendation generation, and other predictive analytics.
* Artificial Intelligence-as-a-Service (“AIaaS”) for Big Data Applications – Companies that provide artificial intelligence capabilities to their customers as a service. Companies in this segment typically offer cloud-based platforms that allow their customers to apply artificial intelligence techniques to big data without the need for a direct investment in their own artificial intelligence-related infrastructure or capabilities.
Many companies in the Artificial Intelligence Developers category are considered “big data owners” due to the large amounts of consumer, industry, financial or other types of data that has been acquired through their platforms, products and services. These companies have typically developed internal capabilities in artificial intelligence technology and are using these capabilities to create competitive advantage in their businesses. This category may include companies from sectors including, but not limited to, Information Technology, Industrials, Financials, and Consumer Discretionary.
* Artificial Intelligence and Big Data Analytics Hardware
* Artificial Intelligence Hardware – Companies that produce semiconductors, memory storage and other hardware that is utilized for artificial intelligence applications. This currently includes, but is not limited to, companies that produce graphics processing units (GPUs), application-specific integrated circuit (“ASIC”) chips, field-programmable gate array (“FPGA”) chips, and all-flash array storage.
* Quantum Computing – Companies that are developing quantum computing technology. While currently in the process of being commercialized, quantum computing is expected to have significant potential for artificial intelligence and big data applications.
In order to be included in the Underlying Index, a company must be classified in one of the categories described above. This classification is based on a composite analysis of public filings, products and services, official company statements and other information regarding direct involvement in the artificial intelligence and big data categories as described above. Eligible companies are then ranked using a research framework that assesses a company’s exposure to these categories. Companies must receive a minimum score within a given category to be selected in the Underlying Index. Accordingly, the Fund assets will be concentrated (that is, it will hold 25% or more of its total assets) in companies that provide exposure to the artificial intelligence and big data industry.
The Underlying Index is weighted according to a modified capitalization weighting methodology and is reconstituted annually with a semi-annual re-weighting. The Underlying Index may include large-, mid- or small-capitalization companies, and components primarily include information technology companies. The Fund’s investment objective and Underlying Index may be changed without shareholder approval.
Index Top Holdings (05/07/18):
| Baidu, Inc. | 3.25% |
| Alibaba Group Holding Ltd. | 3.24% |
| NVIDIA Corp. | 3.23% |
| Facebook, Inc | 3.18% |
| Amazon.com, Inc. | 3.11% |
| Intel Corp. | 3.08% |
| Salesforce.com, Inc. | 3.07% |
| Qualcomm, Inc. | 3.06% |
| Adobe Systems, Inc. | 3.05% |
| Microsoft Corp. | 3.01% |
INDEX SUB-INDUSTRY BREAKDOWN (05/07/18):
| Internet Software & Services | 23.91% |
| Semiconductors | 15.12% |
| Application Software | 14.96% |
| System Software | 13.23% |
| Internet & Direct Marketing Retail | 6.07% |
| IT Consulting & Other Services | 5.29% |
| Technology Hardware, Storage & Peripherals | 4.65% |
| Aerospace & Defense | 4.46% |
| Research & Consulting Services | 3.95% |
| Others | 8.36% |
INDEX COUNTRY BREAKDOWN (05/07/18):
| United States | 77.46% |
| Cayman Islands | 9.29% |
| Germany | 4.25% |
| Canada | 2.54% |
| Jersey | 1.58% |
| Ireland | 1.07% |
| South Korea | 0.97% |
| Taiwan | 0.91% |
| United Kingdom | 0.88% |
| Others | 1.06% |
Useful Links:
AIQ Home Page
ETFtrack Comment:
Here is a comment from lex Ashby, director of product development at Global X:
“Given AI’s potential to impact a variety of sectors, we believe it is poised to become one of the most significant technological innovations of the modern era. Our aim with all of our technology-thematic funds is to provide efficient access to the companies leading the charge in the world’s most disruptive trends. AIQ seeks to provide investors with exposure to the long-term growth potential of the big data and artificial intelligence theme.”