Artificial Wise Tree

Europe

WisdomTree launches AI ETF

WisdomTree’s European arm is listing a new ETF that guns after global artificial intelligence companies. The WisdomTree Artificial Intelligence UCITS ETF (WTAI) will track the NASDAQ CTA Artificial Intelligence Index, which is built by Nasdaq and the Consumer Technology Association, the trade organisation for tech companies.

Companies are vetted for certain basic liquidity criteria. Those deemed liquid enough are then examined by CTA and Nasdaq to see how involved in AI they are. AI companies are grouped into three categories:

1.     Enablers are companies that develop the building block components for artificial intelligence, such as advanced machinery, autonomous systems/self-driving vehicles, semiconductors, databases used for machine learning.

2.     Engagers are companies that design, create, integrate, or deliver artificial intelligence in the form of products, software, or systems.

3.     Enhancers are companies that provide their own value-added services within the Artificial Intelligence ecosystem, but which are not core to their product or service offering.

The top 15 most involved in each category are included in the index.

As is common for thematic ETFs, the weighting for AI companies is tiered, with Enablers getting 40%, Engagers getting 50% and Enhancers getting 10% of the index. Companies within each tier are equally weighted.

Interestingly – and in what is the first of its kind that we have seen – the index adds a liquidity tweak to its equal weighting. This liquidity tweak means that companies that aren’t liquid enough forgo some of their weighting in the index, which is then spread to other companies in its tier.

Going through the index factsheet, the country the fund is most exposed to is the US – by far, with 60% of the index, followed by Taiwan and Japan.

 

Australia

Fidante lists “cash-like” ETF that binges on risk

Sydney-based $60bn fund manager Fidante Partners is listing a new actively managed bond ETF that will target the flush-with-cash self-managed superannuation market. The ActiveX Ardea Real Outcome Bond Fund (XARO), which lists on Wednesday, will provide an ETF share class of an existing mutual fund, the Ardea Real Outcome Fund.

The mutual fund – and therefore the ETF – benchmark themselves against the risk-free rate and claim to provide benefits similar to an absolute return fund. It aims to beat CPI by around 2% by investing in government bonds, from anywhere in the world, but also in derivatives and other cash-like instruments.

The fund will charge 0.50%.