This article was originally published on ETFTrends.com.
Artificial intelligence (AI) is a growing, credible investment theme and some issuers of exchange traded funds are meeting that growth. Funds in this arena include the Global X Future Analytics Tech ETF (AIQ) , which launched last May.
The Global X Future Analytics Tech ETF tries to reflect the performance of the Indxx Artificial Intelligence & Big Data Index, which is comprised of companies involved in the development and utilization of artificial intelligence and big data. The underlying index includes those involved in generating vast amounts of data and developing proprietary AI systems to derive actionable insights from the data set. The ETF will also cover companies that provide AI-as-a-Service for big data analytics or are developing hardware integral to powering AI systems, such as quantum computing.
Thematic ETFs, such as AIQ, often address investment niches with significant long-term growth potential and that is true of this Global X fund.
Artificial intelligence refers to the process of machines or computers performing tasks that would otherwise require human intelligence. AI relies on processing huge amounts of data, or “big data,” to learn. The potential of AI systems is based off the accumulation of big data. Some observers project the emergence of AI could add up to $15.7 trillion to global GDP by 2030.
“Nourished by an ever-growing reservoir of data, the stage has been set for AI to become a disruptive force across the global economy,” according to Global X research. “According to one report, AI could contribute up to $15.7 trillion to global GDP in 2030, with $9.1 trillion coming from consumption-side effects and $6.6 trillion coming from increased productivity. For context, that would add about 14% to global GDP, or more than China and India’s combined output.”
What's Next for the AIQ ETF
AIQ holds 80 stocks and as is the case with many thematic ETFs, the fund is not explicitly dedicated to one sector. With AI's wide-ranging applications, multiple sectors can be part of the AI investment thesis. However, the technology and communication services sectors combine for over 77% of AIQ's roster.
The industrial, automotive and retail industries, among others, will be impacted by AI. Healthcare is part of that group, too.
“Applying AI to the US health care system could result in $150 billion in annual savings by 2026 and improvements in patient outcomes,” according to Global X. “From robot-conducted surgery, aided by integrating diagnostic imaging and pre-op medical data, to virtual nursing assistants that help with initial diagnoses and patient logistics, AI is expected to revolutionize a variety of aspects of health care.”
For more thematic investment strategies, visit our Thematic Investing Channel.
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