Asset management giant BlackRock has launched two new exchange-traded funds (ETFs) aimed at providing investors with exposure to the rapidly growing artificial intelligence (AI) market. With generative AI becoming increasingly integrated across various industries, BlackRock sees this as a significant investment opportunity.
Key Takeaways
BlackRock introduces two ETFs focused on AI and technology.
The iShares A.I. Innovation and Tech Active ETF targets global AI and tech stocks.
The iShares Technology Opportunities Active ETF aims for long-term capital appreciation in tech sectors.
Demand for thematic ETFs has been mixed, with some investors favoring traditional index funds.
BlackRock's assets under management have reached a record high amid a stock market rally.
BlackRock's New ETFs
On October 22, 2024, BlackRock unveiled its iShares A.I. Innovation and Tech Active ETF and the iShares Technology Opportunities Active ETF. These funds are designed to tap into the burgeoning AI sector, which is expected to revolutionize industries ranging from technology to financial services.
The iShares A.I. Innovation and Tech Active ETF will invest in a diverse range of global AI and technology stocks, catering to various market capitalizations. This ETF aims to provide investors with a comprehensive exposure to the AI landscape, which is characterized by rapid innovation and growth.
In contrast, the iShares Technology Opportunities Active ETF focuses on long-term capital appreciation by investing in global technology companies across multiple sectors, including semiconductors, software, and hardware. This ETF is designed to help investors capitalize on emerging trends and technologies that are shaping the future.
Thematic ETFs and Market Trends
The launch of these ETFs comes at a time when asset managers are increasingly rolling out thematic ETFs to capitalize on specific trends and sectors. Unlike traditional ETFs that track broad market indexes, thematic ETFs focus on particular themes, allowing investors to target specific areas of growth.
However, the demand for these products has been mixed in recent months. Many investors have shown a preference for funds linked to stock market benchmarks, which are currently near record highs. This shift in investor sentiment has raised questions about the sustainability of thematic investing in the current market environment.
BlackRock's Performance
Despite the mixed demand for thematic ETFs, BlackRock has reported strong financial performance. Earlier this month, the asset manager exceeded Wall Street estimates for its third-quarter profit, and its assets under management (AUM) reached a record high of $4.2 trillion as of September 30. This growth has been largely attributed to a rally in the U.S. stock market, which has boosted inflows into its iShares business, which includes over 1,400 ETFs.
Tony Kim, BlackRock's head of the fundamental equities technology group, emphasized the potential of these active ETFs, stating, "These active ETFs can help investors seize outsized and overlooked investment opportunities across the full stack of AI and advanced technologies."
As the AI market continues to expand, BlackRock's new ETFs position the firm to capitalize on this trend, offering investors a chance to engage with one of the most transformative technologies of our time.
Sources
BlackRock taps into AI frenzy with two new ETFs | Reuters, Reuters.