Taiwan’s stock market soared, delivering a remarkable surge and nearing the significant 20,000-point milestone, largely attributed to the resurgence of AI-related stocks. For investors looking to tap into this trend, an array of ETFs focused on Artificial Intelligence is worth considering.
One such ETF is “Cathay Nasdaq Global Artificial Intelligence and Robotics Fund” (Ticker: 00737), managed by Cathay Securities Investment Trust. This overseas ETF was established on May 29, 2018, and listed shortly after on June 11, 2018. Managed by Yun-Chu Chen, it operates under the Taiwanese currency and has E.Sun Bank as its custodian. It holds an annual management fee of 0.85% and a custodian fee of 0.25%.
The ETF tracks the Nasdaq CTA Global AI and Robotics Index, capturing companies across the entire supply chain of AI and robotics. This ensures that investors are exposed to companies engaged in semiconductor chip design, databases, algorithm development, software, robot production, smart healthcare, and others that enhance their core capabilities through AI.
The index is a collaborative effort between NASDAQ and the American Consumer Technology Association (CTA), featuring an equal-weighted layout which is adjusted quarterly. Changes to the constituent stocks are made semi-annually.
As of the end of March 2024, some of the major constituents of the ETF include MOBILEYE GLOBAL CL A, Darktrace Rg, AEROVIRONMENT,INC., and others. On April 24, the closing price was TWD 30.01, compared to a net value of TWD 30.04, marking a slight undervaluation. However, with a daily gain and boasting a return of 3.42% for the year, and 58.60% since inception, the ETF’s performance is encouraging and well-positioned to benefit from further upside in AI stocks.
(Source: Cathay Securities Investment Trust)
Important Questions and Answers:
Q: Why is Taiwan’s stock market experiencing a surge?
A: Taiwan’s stock market surge can be attributed to a resurgence in AI-related stocks, reflecting broader trends in technology and growth in the AI sector.
Q: What challenges do AI-themed ETFs face?
A: AI-themed ETFs may face challenges such as technological obsolescence, regulatory hurdles, heavy competition, market volatility, and the complexity of accurately assessing AI companies’ potential.
Q: What are the advantages of investing in an AI-themed ETF?
A: Advantages include diversification in a high-growth sector, access to a broad range of AI companies across the supply chain, and exposure to the potential of emerging technologies and innovations.
Q: What are the disadvantages of investing in an AI-themed ETF?
A: Disadvantages may include higher expense ratios compared to broad-market ETFs, exposure to sector-specific risks, and the potential impact of rapid technological changes on the index composition and stock performance.
Key Challenges or Controversies:
Investing in sector-specific ETFs like the Cathay Nasdaq Global Artificial Intelligence and Robotics Fund entails risks associated with market concentration. Rapid changes in technology can make certain investments obsolete. Additionally, there is a potential for regulatory challenges as governments across the world grapple with the legal and ethical implications of AI and robotics.
Advantages:
Investors gain exposure to a diversified portfolio targeting a cutting-edge sector without having to individually research and select stocks. There’s also the potential for substantial long-term growth as AI and robotics technologies continue to advance and proliferate across industries.
Disadvantages:
The specialized nature of the ETF means it may be more volatile than more diversified funds. The higher expense and custodian fees could also affect net returns, and investors need to be wary of how quickly technology in this sector can evolve, making some holdings outdated.
Related Links:
For more information on global stock markets, ETFs, and financial news, you might visit:
– Bloomberg
– Reuters
– CNBC
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The source of the article is from the blog radardovalemg.com