Amundi launches global thematic ETF on artificial intelligence

Sep 12th, 2018 | By | Category: Equities

Amundi has launched the Amundi Stoxx Global Artificial Intelligence UCITS ETF (GOAI FP) on Euronext Paris, providing exposure to equities listed globally that are closely related to the theme of artificial intelligence (AI).

Amundi launches global thematic ETF on artificial intelligence

AI refers to the science of creating computer programs and machines that exhibit human-like intelligence and cognitive skills.

AI refers to the science of creating computer programmes and machines that exhibit human-like intelligence and cognitive skills.

AI includes technologies ranging from machine learning to natural language processing and computer vision. The technology is expected to have a significant impact across many sectors and geographies in the coming years.

Fannie Wurtz, Managing Director of Amundi ETF, Indexing & Smart Beta, commented, “We’re particularly excited to be able to offer investors this innovative ETF which provides a cost-efficient way to gain exposure to Artificial Intelligence, a key driver of future growth.”

She added, “Product innovation is one of the core principles of Amundi ETF and this new listing demonstrates our commitment to providing our clients with new solutions for their long-term investment objectives.”

The fund tracks the Stoxx AI Global Artificial intelligence ADTV5 Index which screens the parent Stoxx Developed and Emerging Markets Index universe for companies that invest heavily in the development of new AI technologies and are therefore considered to be well-positioned to benefit from the increased adoption of AI technologies.

Harnessing data from Yewno, a provider of AI solutions to the financial sector, the systematic selection process analyses stocks according to two metrics: AI exposure and AI contribution.

The former compares each company’s total registered AI patents over the most recent three-year period to the total number of AI patents registered globally, and the latter weighs the percentage of each company’s total patents relating to AI, again over the most recent three years. The index only includes companies which fall within the top three quartiles of each category.

The remaining companies are then screened for liquidity, only selecting stocks with a three-month average daily trading value (ADTV) greater than €5 million. The index is equal-weighted.

Over half (53.8%) of the index exposure is assigned to stocks listed in the US with a further fifth (18.7%) allocated to stocks from Japan. The next largest country exposures are South Korea (4.6%) and Taiwan (3.9%).

Not surprisingly, technology stocks make up the largest sector allocation with a weight of 39.7%. Reflecting how AI may potentially impact a wide variety of industries though, the index also has significant exposure to stocks from the industrial goods & services (21.4%), automobiles & parts (8.0%), and telecommunications (5.6%) sectors.

The surge in interest in AI has already produced a positive effect on stock prices of firms closely related to the theme with the fund’s index having significantly outperformed its parent index over the past one, three, and five year horizons. Its annualized five-year return is 17.2%, compared to 11.9% for the Stoxx Developed and Emerging Markets Index, although annualized volatility has been slightly higher at 13.6% compared to 12.8% for the parent.

The fund has a total expense ratio (TER) of 0.35%.

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