Wedbush, Dan Ives launch new ETF to capture the AI boom

Wedbush tech analyst Dan Ives is launching the Dan Ives Wedbush AI Revolution ETF (IVES) to capitalize on the artificial intelligence boom, tracking an index of 30 AI-related companies identified by Wedbush research. The ETF, with a 0.75% management fee, will be reconfigured quarterly to reflect the evolving AI landscape, encompassing sectors beyond semiconductors to include software, infrastructure, and consumer applications; it will compete with existing AI-themed ETFs like AIQ, which has $3 billion AUM and a 0.68% fee.

Analysis

Wedbush tech analyst Dan Ives is launching the Dan Ives Wedbush AI Revolution ETF (ticker: IVES), aiming to provide investors with a vehicle to invest in companies central to the artificial intelligence boom. The ETF will track a dynamic index, the Ives AI 30, which is based on Wedbush's research and will be reconfigured quarterly, or more frequently in response to corporate actions, to reflect the evolving AI landscape. This 'living organism' approach is intended to capture opportunities as the AI revolution expands from semiconductors into software, infrastructure, and consumer applications. Initial holdings include prominent tech giants such as Nvidia, Microsoft, Alphabet, Amazon, and Tesla, alongside smaller, specialized firms like SoundHound AI and CyberArk Software. The fund, managed day-to-day by Wedbush Fund Advisers' CIO Cullen Rogers, is described as a passive product that leverages Ives' insights within an institutional framework, straddling the line between active and passive management. The ETF enters a competitive space, with existing funds like the Global X Artificial Intelligence & Technology ETF (AIQ), which has over $3 billion in assets and a 22% return over the past year. The IVES ETF carries a management fee of 0.75%, which is higher than AIQ's 0.68% and many passive thematic ETFs, but below the average for active U.S. equity funds. The launch reflects an optimistic view on the continued growth and diversification of the AI sector, although AI-themed ETFs face challenges due to the industry's rapid development and the private status of some key players.

Key Decisions for Investors

• Investors interested in targeted AI exposure guided by Dan Ives' research should evaluate the IVES ETF, considering its dynamic index methodology designed to adapt to the evolving AI theme.
• The 0.75% management fee should be weighed against the potential value of the research-driven, actively-reconfigured index, and compared to competitor ETFs like AIQ which has a 0.68% fee and significant assets under management.
• Consider the fund's concentration in 30 stocks, including many widely-held large-cap tech names, and monitor its performance in capturing the anticipated expansion of AI into diverse sub-sectors beyond semiconductors.
• Given the fund's strategy to be a 'living organism,' investors should track how effectively the quarterly reconfigurations adapt to the fast-developing AI industry and differentiate from broader market indices or existing AI ETFs.