Nowadays, there are ETFs for an increasingly wide array of investment concepts and niches, and big data ETFs have been sprouting up over the past several years.
Yes, “big data” refers to large sets of data, but there is more to it.
“Big data is a term that describes the large volume of data — both structured and unstructured — that inundates a business on a day-to-day basis,” according to SAS. “But it’s not the amount of data that’s important. It’s what organizations do with the data that matters. Big data can be analyzed for insights that lead to better decisions and strategic business moves.”
Bolstering the long-term case for big data ETFs are the wide-ranging applications of big data. Big data’s applications and utility are relevant to multiple industries ranging from the public sector to education to healthcare to transportation and many more.
Here are some of the premier big data ETFs to consider for exposure to this booming theme.
Global X Future Analytics Tech ETF (AIQ)
Expense ratio: 0.68% per year, or $68 on a $10,000 investment.
The original big data ETF closed a while back, so for the time being, the Global X Future Analytics Tech ETF (NASDAQ:AIQ) is one of the closest products investors have to a dedicated big data ETF. AIQ, which debuted last May, follows the Indxx Artificial Intelligence & Big Data Index.
The fund “seeks to invest in companies that potentially stand to benefit from the further development and utilization of artificial intelligence (AI) technology in their products and services, as well as in companies that provide hardware facilitating the use of AI for the analysis of big data,” according to Global X.
AIQ is home to 80 stocks and while predictably heavy on technology stocks (60.54% of the fund’s weight), this big data ETF allocates nearly 34% of its combined weight to the communication services and industrial sectors. Familiar names among AIQ’s top 10 holdings include Facebook (NASDAQ:FB) and Netflix (NASDAQ:NFLX).
“As the accumulation of data continues to grow, so does the potential of AI systems. Some estimates hold that the emergence of AI could contribute up to $15.7 trillion to global GDP in 2030 — more than the current output of China and India combined,” according to Global X.
ALPS Disruptive Technologies ETF (DTEC)
Expense ratio: 0.50% per year, or $50 on a $10,000 investment.
With so few dedicated big data ETFs currently on the market, the ALPS Disruptive Technologies ETF (NYSEARCA:DTEC) makes for an ideal alternative. Not only that, but DTEC is one of the best ETFs for investors looking to augment or move away from traditional tech funds to focus on the fast-growing themes of tomorrow.
DTEC features equal-weight exposure to 10 next generation technology theme, including data and analytics. Other themes featured in DTEC include 3D printing, cloud computing, fintech, mobile payments and robotics.
“Data and analytics is a disruptive technology which enables business users to process every granular bit of data in quicker way, removing the traditional need for sampling & then applying models,” according to ALPS. “It encourages an investigative approach in users for data analysis since they get access to the whole data. It can reveal insights hidden in the data, which were previously too costly due to large data movements.”
Year-to-date and over the past 12 months, DTEC is easily outperforming the Nasdaq.
SPDR Kensho New Economies Composite ETF (KOMP)
Expense ratio: 0.30% per year, or $30 on a $10,000 investment.
Having debuted last October, the SPDR Kensho New Economies Composite ETF (NYSEARCA:KOMP) is one of the newer entrants to the fray of big data ETFs and its inclusion here is admittedly loose, but still relevant. While it is not a dedicated big data ETF, KOMP is something of a quant fund.
KOMP follows an “index utilizing artificial intelligence and a quantitative weighting methodology to pursue the potential of a new economy fueled by innovative companies disrupting traditional industries by leveraging advancements in exponential processing power, artificial intelligence, robotics, and automation,” according to State Street.
Remembering that big data has applications across multiple industries, KOMP is a relevant big data ETF because the fund features exposure to 15 industry groups with aerospace and defense, application software and semiconductor names combining for 22% of the fund’s weight.
ARK Web x.O ETF (ARKW)
Expense ratio: 0.75% per year, or $75 on a $10,000 investment.
Like several of the other funds highlighted here, the actively managed ARK Web x.O ETF (NYSEARCA:ARKW) is not a dedicated big data ETF, but the fund does have some big data exposure.
“Companies within ARKW are focused on and expected to benefit from shifting the bases of technology infrastructure to the cloud, enabling mobile, new and local services, such as companies that rely on or benefit from the increased use of shared technology, infrastructure and services, internet-based products and services, new payment methods, big data, the internet of things, and social distribution and media,” according to ARK Investment Management.
Top 10 holdings in the $382 million ARKW include NVIDIA (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA). Since inception in September 2014, ARKW has posted average annualized returns of more than 24%, according to issuer data.
Robo Global Robotics & Automation Index ETF (ROBO)
Expense ratio: 0.95% per year, or $95 on a $10,000 investment.
The original and still one of the largest robotics ETFs, the Robo Global Robotics & Automation Index ETF (NASDAQ:ROBO) has some credibility as a big data ETF due to the intersections of automation and robotics with big data.
Artificial intelligence “leverages unstructured customer interactions along with structured customer data, and applies text analytics and multiple machine learning models to deliver accurate predictions about churn risk, winback” and other business-related applications, according to ETF Trends.
ROBO holds almost 90 stocks, 74% of which are either mid- or small-cap names. About half of ROBO’s components are technology stocks, but the fund features significant exposure to the healthcare and industrial sectors, too. Following a rough 2018, ROBO is up 19% year-to-date.
Todd Shriber does not own any of the aforementioned securities.
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