Taishin launches global AI and robotics ETF in Taiwan

Aug 12th, 2019 | By | Category: Equities

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Taipei-based investment manager Taishin Securities has launched a new ETF, providing exposure to global securities of firms linked to the themes of artificial intelligence, automation, and robotics.

Taishin launches AI and robotics ETF in Taiwan

The fund provides global exposure to firms linked to the themes of AI, robotics, and automation.

The Taishin SG Global AI and Robotics Select ETF (00851 TT) has listed on the Taiwan Stock Exchange and is linked to the SG Global AI and Robotics Select Index.

The underlying index has been created by French investment bank Société Générale

Index candidates come primarily from developed markets.

Stocks from Eastern Europe and South America are ineligible for selection, as are China A-shares.

Stocks with market capitalizations less than $50 million or average trading volumes below $500,000 are also removed.

Société Générale then employs its equity research department to determine which firms can be assigned to the AI, robotics, and automation industries, disregarding any companies that do not fit these classifications.

Companies that fit one of these classifications are then assigned a composite score based on its relative position to other firms across three key ratios: R&D to sales, Return on Invested Capital (ROIC), and Sales Growth. Companies with higher ratios receive a higher composite score.

The index methodology then selects the 80 stocks with the highest composite scores with constituents weighted by their composite score in order to further enhance exposure to the robotics and AI theme.

The ETF comes with an expense ratio of 1.00%.

There are currently two other ETFs listed in Taiwan that focus on the themes of AI and robotics.

The Cathay Nasdaq AI & Robotics ETF (00737 TT) tracks the Nasdaq CTA Artificial Intelligence and Robotics Index. The index includes companies from both developed and emerging markets that are classified as enablers, engagers, or enhancers for the AI or robotics sectors, as determined by the Consumer Technology Association. The fund comes with an expense ratio of 1.16%.

Alternatively, the Yuanta STOXX Global Artificial Intelligence ETF (00762 TT) homes in specifically on the AI theme by tracking the STOXX Global Artificial Intelligence Index which also includes both developed and emerging market companies. Its expense ratio is 0.90%.

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