Trillions
AI Mania Is Coming for ETFs
Jun 8, 2023
Dave Mazza, chief strategy officer for Roundhill, and Rebecca Sin, an ETF analyst for Bloomberg Intelligence, discuss the hype versus reality of AI in the ETF industry, exploring approaches and challenges faced by AI-powered funds. They also explore the impact of AI on ETFs, identifying companies with unique AI exposure, discussing the potential of AI in interviews and its influence in the tech sector, and sharing their favorite ETF tickers.
27:37
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Quick takeaways
- AI-powered ETFs face challenges like high fees, turnover, and the need to limit costs to improve performance.
- Investors interested in AI-themed ETFs should carefully consider the fund's methodology, holdings, and expenses to ensure they align with the desired exposure to AI.
Deep dives
AI-Powered ETFs: Utilizing AI for Investment
AI-powered ETFs utilize artificial intelligence to inform investment decisions, leveraging algorithms and data analysis to identify opportunities for alpha generation. However, these ETFs face challenges, including high fees, turnover, and the need to limit costs to improve performance. Some AI-powered ETFs, like AIQ, have lagged behind the broader market due to excessive trading. As the AI space evolves, finding the right fund managers becomes crucial, as their decisions and tweaks to the model impact the fund's performance. The growth of AI-powered ETFs is expected to continue, with more than 150 ETFs focused on AI projected to exist by 2030.
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