ETFs, Investments

AI ETF enters the market

AI Artificial intelligence ETF Global X

Global X has added to its suite of technology-focused ETFs with a new fund targeting the growth of the artificial intelligence sector.

Global X ETFs has launched an artificial intelligence (AI) exchange-traded fund (ETF) offering diversified exposure to companies that stand to benefit from the further development and use of the technology.

The Global X Artificial Intelligence ETF, carrying the Australian Securities Exchange (ASX) code of GXAI, will track the Indxx Artificial Intelligence and Big Data Index, which includes technology giants Nvidia, Meta, Netflix, Tencent and Amazon in its holdings. The ETF has a management fee of 57 basis points.

Global X chief executive Evan Metcalf said the potential uses of AI created an avenue for investors to access growth opportunities while the sector continues to develop.

“Artificial intelligence is still maturing and with this natural evolution comes the potential opportunities for new applications. GXAI offers investors a way to target the rapid advancements and capabilities of AI technologies across a range of industries and a diversified selection of companies,” Metcalf noted.

“We believe there is a big appetite for AI-related ETFs in the local market as Global X has already seen a combined $125 million in flows this year to date across the Global X FANG+ ETF (ASX: FANG) and the Global X Semiconductor ETF (ASX: SEMI), which offer exposure to subsets of the AI theme.

“AI is not a flash in the pan; it’s a structural shift which will change industries and life as we know it. Australian investors can use GXAI to invest in leading companies across the value chain of this megatrend which are positioned to benefit from AI adoption and innovation.”

Global X head of thematic solutions Scott Helfstein added the fund will aim to distribute risk across its portfolio and will appeal to investors seeking diversification.

“While GXAI captures some of the most prominent names in the AI sector, such as Netflix, Adobe and Nvidia, it applies moderation through a single-stock cap exposure of 3 per cent. This acts as a natural portfolio diversifier and presents a more balanced portfolio which thoughtfully targets the AI theme,” Helfstein noted.

“In the past 12 months, we’ve seen an increased global appetite to capitalise on the growth potential of AI technologies and we expect this momentum to continue. It is important for investors to have strong, well-tested investment vehicles at their disposal to capitalise on this important thematic.”

The launch of the offering adds to Global X’s suite of 36 ETFs following the release of a cybersecurity fund last year.


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