Amplify ETF Adds AI Tilt to Cloud ETF
Amplify ETFs in Chicago is tapping into the fast-growing artificial intelligence space with the Amplify Bloomberg AI Value Chain ETF (AIVC).
AIVC tracks the equal-weighted Bloomberg AI Value Chain Index, which is made up of a global blend of semiconductor, cloud/software and hardware companies in an area estimated to increase more than five-fold over the next decade.
AIVC, which started trading Monday, Oct. 21, has evolved from the Amplify Global Cloud Technology ETF (IVES), which underwent a name, fee and strategy change announced by Amplify in August in regulatory filings.
The AIVC expense ratio is set at 58 basis points, down from 69 as IVES.
IVES was one of 14 ETFs, which combined for $3.7 billion, that became part of the Amplify lineup through the January acquisition of ETF Managers Group.
Beyond Cloud Computing
By expanding beyond cloud computing into the AI space, Amplify is targeting growth potential while also entering a more competitive ETF category.
According to Amplify’s data the artificial intelligence market is forecasted to grow to $3.6 trillion by 2034, up from an estimated $638 billion today.
According to etf.com, there are currently 41 ETFs in the AI space that combine for nearly $11 billion in assets under management.
The three largest AI ETFs are all over $1 billion. The Global X Robotics & Artificial Intelligence ETF (BOTZ) has $2.5 billion, the Global X Artificial Intelligence & Technology ETF (AIQ) has $2.3 billion, and the Robo Global Robotics and Automation Index ETF (ROBO) has $1.2 billion.
Amplify explained in a statement that the growth in the artificial intelligence category will be driven by increased AI spending across the private sector, government initiatives and individuals.
Nate Miller, Amplify vice president of product development, said the cloud computing market is not being ignored through AIVC because the underlying index is evenly exposed to the hardware, semiconductors and cloud computing categories.
“We view those as the picks and axes that will be the winners, regardless,” he said.
Amplify manages 30 ETFs that combine for $9.3 billion in total assets.