ETF Prime: Zeno Mercer on Nvidia and More
This article was originally published on ETFTrends.com.
On this week’s episode of ETF Prime, host Nate Geraci spoke with a trio of individuals, discussing several ETF-related topics. To open this week’s podcast, Geraci brought on VettaFi’s Zeno Mercer to talk about Nvidia, the artificial intelligence industry, and more. Then Geraci brought on State Street’s Matt Bartolini to discuss the SPDR S&P 500 ETF Trust (SPY) crossing $500 billion in total assets. To close the podcast, Geraci brought on Arch Indices’ Yang Tang to highlight the firm's Arch Indices VOI Absolute Income Fund (VWI).
Mercer’s Take on Nvidia
To open this week’s episode, Geraci was joined by VettaFi’s Zeno Mercer, a senior research analyst with the firm. He specializes in artificial intelligence. Mercer also works alongside the indexing team at VettaFi, which is the indexing provider for the ROBO Global Artificial Intelligence ETF (THNQ).
Because of Mercer’s deep knowledge of artificial intelligence, Geraci brought him on to discuss Nvidia in-depth. Before diving into it completely, Geraci shared the positive effects Nvidia’s recent earnings report had on its stock and the market overall. Geraci then asked for Mercer's take on the release of the firm's earnings report.
“The fact that AI GPU investments are going up ahead of expectations shouldn’t be surprising anyone,” Mercer said.
Mercer then shared some key statistics highlighting the major growth Nvidia has seen in its year-over-year returns and 2023 revenue. He said this growth was driven by growth in data centers, AI GPUs, and several other business areas. However, Mercer believes the majority of the growth could be attributed to its best-in-class AI-enabled GPUs, which is what the firm refers to as its "hopper series."
AI Industry Competition
The conversation then shifted gears from Nvidia when Geraci pondered what he expects from the competition in the industry. He shared that he imagines companies aren’t going to sit on the sidelines and watch Nvidia continue to run the industry. Geraci believes other companies will continue to develop their products to compete with the firm and its chips. He then asked what Mercer expects from the industry moving forward.
“It's clear that the market is going to keep growing,” Mercer replied.
Mercer said experts are expecting the semiconductor industry to grow to over a $1 trillion industry as the technology develops. However, he thinks that as the technology continues to develop, there will be some true separation among key players in the industry. Mercer continued to dive into how other AI companies can separate themselves from Nvidia and the competitive landscape. In addition, he shared whether investors should worry about the currently top-heavy S&P 500.
SPY’s Recent Accomplishment
State Street’s Matt Bartolini then joined Geraci to discuss several different ETF-related topics. Before their conversation, Geraci highlighted that State Street offers around 140 ETFs and has over $1.2 trillion in total assets. He then said that one of State Street's key products, the SPDR S&P 500 ETF Trust (SPY), just crossed over $500 billion in total assets last week, making it the first ETF to do so. Geraci then asked Bartolini to reflect on this recent accomplishment of SPY.
“I think it’s just a great milestone, and it really reflects the longevity of not only SPY itself, but the ETF industry,” Bartolini noted.
He said that it solidifies the continuous growth of the usage of ETFs in investors' portfolios. Bartolini also discussed how the markets have performed since the launch of this fund regarding the accumulation of overall assets. He then mentioned that he felt that SPY as a product has a diverse user base that showcases the different types of behaviors that ETF investors tend to enjoy. Bartolini feels that flexibility and the growth opportunity that SPY and ETFs offer, in general, have contributed to the fund's continued growth in assets.
Additionally, Bartolini does a deep dive into the performance of the S&P 500, concentration risk and more.
The Arch Indices VOI Absolute Income ETF (VWI)
To close this week's podcast, Geraci brought on Arch Indices’ CEO and Co-Founder, Yang Tang, who is building what he refers to as the next generation of passive index solutions. The firm's first ETF launched in October 2023, when it released the Arch Indices VOI Absolute Income Fund (VWI). Tang shared how Arch Indices is his true passion project, in which he and his partner dive into their unique optimized portfolio approach. He then broke down some key points of this approach to optimizing portfolios. Geraci then asked Tang to explain the goal of the VWI ETF, and its overall makeup.
“VWI is an income ETF. The idea of this is you want current income, but you also want to reduce portfolio volatility,” Tang shared.
Tang then said that, in a little over five months, this fund has brought in just over $2 million in assets, a feat he is extremely proud of. Ultimately, when looking at the fund, Tang noted that he believes this ETF is an all-in-one income solution. Moreover, Tang and Geraci dive into how the fund's portfolio is constructed, and more.
Listen to the entire episode of ETF Prime Featuring Zeno Mercer, Matt Bartolini, and Yang Tang:
VettaFi LLC (“VettaFi”) is the index provider for THNQ, for which it receives an index licensing fee. However, THNQ is not issued, sponsored, endorsed or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of THNQ.
For more ETF Prime podcast episodes, visit our ETF Prime channel.
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