London, 5 December 2018: WisdomTree, the exchange traded fund (”ETF”) and exchange traded product (”ETP”) sponsor, has partnered with Nasdaq and the Consumer Technology Association (CTA) to launch an ETF providing unique exposure to the Artificial Intelligence (AI) sector. The WisdomTree Artificial Intelligence UCITS ETF listed on the London Stock Exchange today, with a total expense ratio (TER) of 0.40%.
The ETF will provide investors with liquid and cost-effective access to this exponential technology megatrend that is driving efficiencies and new business capabilities across all industries globally and redefining the way we live and work.
Christopher Gannatti, WisdomTree Head of Research in Europe says, “We are delighted to partner with Nasdaq and CTA, who are experts in AI and technology markets. We have worked together, leveraging our combined expertise, to re-define the AI investment landscape.”
“To capture the full economic value of AI we place companies in three categories; Engagers, Enablers and Enhancers*. When investors think of what this can bring to a portfolio, they should be thinking over a long time horizon and about how advances like autonomously driven cars, a digital workforce, mass facial recognition and other applications of intelligent machines could change the world,” Gannatti added.
Rafi Aviav, WisdomTree Head of Product Development in Europe comments, “AI is a revolutionary technology and the market for AI products and services is expected to more than triple over the next three years[1]. This fund offers a unique approach to capturing this expected growth, which is the result of a year-long collaboration between WisdomTree, Nasdaq and CTA.”
“The fund broadly represents the upstream[2] and midstream[3] parts of the AI value chain and so balances diversification with a focused exposure on those parts of the AI value chain that stand to gain the most from growth in the AI market,” Aviav added.
There is no commonly used classification system that allows one to automatically choose companies engaged in the emerging AI space, so the research for the selection of index portfolio companies is conducted by experts with deep familiarity of the AI value chain and the technology markets more broadly. This ensures the portfolio remains focused on AI opportunities rather than becoming just another broad tech fund.
We believe the fund’s unique approach offers the best of both the active and passive investment worlds in accessing the AI megatrend. The fund’s portfolio companies are already capitalising on the AI opportunity across industries and are well positioned for AI’s growth,” Aviav commented.
“AI is one of the key ‘ingredient technologies’ over the next decade – deployed everywhere from factory floors and retail stores to banks and insurance offices, creating new opportunities,” said Jack Cutts, senior director of business intelligence and research, CTA. “We’ll see this play out in January at CES® 2019 – the most influential tech event in the world – where AI will be a dominant theme, showcasing the massive potential AI has to change our lives for the better. We’re excited to partner with Nasdaq and WisdomTree to make AI investible.”
“Artificial Intelligence is at an inflection point to drive further economic growth and create new areas of opportunity,” said Dave Gedeon, Vice President and Head of Research and Development for Nasdaq Global Indexes. “The Nasdaq CTA Artificial Intelligence Index serves as an important benchmark for tracking the adoption of AI across a broad range of economic sectors as this influential technology hastens advancements in productivity and capacity.”
WisdomTree Artificial Intelligence UCITS ETF: Under the hood
The WisdomTree Artificial Intelligence UCITS ETF tracks the Nasdaq CTA Artificial Intelligence Index. This enables investors to gain diversified exposure which is focused on companies that stand to gain the most from growth in AI adoption and performance. The index can evolve as new AI trends and companies come on stream through a semi-annual update. The Index is currently comprised of 52 constituents globally with stringent eligibility criteria:
• Define Universe: Companies must be listed on a set of recognized global stock exchanges and satisfy minimum liquidity criteria and market capitalization criteria to be included in the index.
• Identify and Classify: Companies are identified as belonging to the AI value
chain and classified into the following categories: Enhancers, Enables and Engagers (see below for definitions.)
• Determine AI Exposure: The AI exposure for each individual stock is investigated and scored.
• Top Selection: Only companies with the top 15 scores in each category (Enhancers, Enablers and Engagers) are selected for inclusion, and their weight is allocated evenly in each category.
• Allocate Weight: In total Engagers comprise 50% of index exposure, Enablers comprise 40%, and Enhancers comprise 10% of index exposure.
*Engagers: Companies whose focus is providing AI-powered products & services.
Enablers: Companies who are key players in this space, with some of their core products and services enabling AI. They include component manufacturers (including relevant CPUs, GPUs etc.), and platform and algorithm providers that power the development and running of AI processes.
Enhancers: Companies who are a prominent force in AI but whose relevant product or service is not currently a core part of their revenue. They include chip manufacturers, and platform and algorithm providers that power the development and running of AI-powered products & services.
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[1] Source: New IDC Spending Guide, International Data Corporation (IDC), 19 September 2018.
2 Upstream AI constituents include component manufacturers, platform providers and algorithm providers
3 Midstream AI constituents consist primarily of AI powered solution providers
Notes to Editors
About WisdomTree Europe Ltd.
WisdomTree Investments, Inc., through its subsidiaries in the US, Europe and Japan (collectively, ”WisdomTree”), is an exchange traded fund (”ETF”) and exchange traded product (”ETP”) sponsor. WisdomTree offers products covering equities, fixed income, currencies, commodities and alternative strategies. Through WisdomTree UK Limited, it sponsors WisdomTree UCITS ETFs and ETPs from ETF Securities and Boost, in a wide range of asset classes, including short and leverage ETPs. WisdomTree currently has approximately $56.5 billion (as of 28 November 2018) in assets under management globally. For more information, please visit www.wisdomtree.com.
WisdomTree® is the marketing name for WisdomTree Investments, Inc. and its subsidiaries worldwide.
About Nasdaq
Nasdaq (Nasdaq: NDAQ) is a leading global provider of trading, clearing, exchange technology, listing, information and public company services. Through its diverse portfolio of solutions, Nasdaq enables customers to plan, optimize and execute their business vision with confidence, using proven technologies that provide transparency and insight for navigating today’s global capital markets. As the creator of the world’s first electronic stock market, its technology powers more than 100 marketplaces in 50 countries, and 1 in 10 of the world’s securities transactions. Nasdaq is home to over 4,000 total listings with a market value of approximately $15 trillion. To learn more, visit business.nasdaq.com.
About the Consumer Technology Association
Consumer Technology Association (CTA)TM is the trade association representing the $377 billion U.S. consumer technology industry, which supports more than 15 million U.S. jobs. More than 2,200 companies – 80 percent are small businesses and startups; others are among the world’s best-known brands – enjoy the benefits of CTA membership including policy advocacy, market research, technical education, industry promotion, standards development and the fostering of business and strategic relationships. CTA also owns and produces CES® – the world’s gathering place for all who thrive on the business of consumer technologies. Profits from CES are reinvested into CTA’s industry services.
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