The VistaShares Artificial Intelligence Supercycle ETF (AIS) has become the best-performing AI-focused ETF of the year. Through June 3 it's up 119%, enough to rank it fifth among all US-listed non-leveraged ETFs.
The fund launched in December 2024 and has a 0.75% expense ratio.
What makes AIS unusual is how it's run. It's an actively managed fund, but one that more or less tracks an index, the BITA VistaShares Artificial Intelligence Supercycle Index.
The prospectus says that the fund's sub-adviser can buy names not yet in the index or sell ones not yet removed, acting on new information between the index's twice-yearly rebalances.
If a holding's outlook sours or a fresh IPO looks compelling, the manager can move before the index does. As a result, holdings and performance can "deviate significantly" from the index.
The index itself is constructed by sorting stocks into AI buckets, like semiconductors, AI software, and data center infrastructure. Stocks are weighted within a bucket by market share, while the buckets themselves are weighted by how important the index provider judges each one to be to AI.
In essence, the fund ends up with two layers of discretion. The index provider decides which buckets of AI stocks get the most weight, and the active manager decides how closely to follow the index.
Right now semiconductors and semiconductor equipment make up about half the portfolio. The other half spreads across tech hardware, storage and peripherals, communications equipment, software, electronic equipment and electrical equipment.
Geographically, it leans American, with the US at 60%, Taiwan at 15%, China at 10% and South Korea at 6%. The top individual positions are SK Hynix at 11%, Micron at 8%, AMD at 5% and Marvell at 4%.
Beyond the chipmakers, the fund holds names like data center cooling company Vertiv and GE Vernova in power, with software stocks like CrowdStrike and Palo Alto Networks also in the mix.
It's worth noting that AIS's index caps any single stock between 0.2% and 4.5% and rebalances in June and December. Today, SK Hynix, Micron and AMD all sit above that 4.5% line, likely because those stocks have gone vertical, doubling and tripling in a short amount of time, so they're temporarily above the caps before the next rebalance.
They'll probably come down then, though given the discretion the manager has, it's possible one or more of them could remain above the cap.
The fund launched in December 2024 and has a 0.75% expense ratio.
What makes AIS unusual is how it's run. It's an actively managed fund, but one that more or less tracks an index, the BITA VistaShares Artificial Intelligence Supercycle Index.
The prospectus says that the fund's sub-adviser can buy names not yet in the index or sell ones not yet removed, acting on new information between the index's twice-yearly rebalances.
If a holding's outlook sours or a fresh IPO looks compelling, the manager can move before the index does. As a result, holdings and performance can "deviate significantly" from the index.
The index itself is constructed by sorting stocks into AI buckets, like semiconductors, AI software, and data center infrastructure. Stocks are weighted within a bucket by market share, while the buckets themselves are weighted by how important the index provider judges each one to be to AI.
In essence, the fund ends up with two layers of discretion. The index provider decides which buckets of AI stocks get the most weight, and the active manager decides how closely to follow the index.
Right now semiconductors and semiconductor equipment make up about half the portfolio. The other half spreads across tech hardware, storage and peripherals, communications equipment, software, electronic equipment and electrical equipment.
Geographically, it leans American, with the US at 60%, Taiwan at 15%, China at 10% and South Korea at 6%. The top individual positions are SK Hynix at 11%, Micron at 8%, AMD at 5% and Marvell at 4%.
Beyond the chipmakers, the fund holds names like data center cooling company Vertiv and GE Vernova in power, with software stocks like CrowdStrike and Palo Alto Networks also in the mix.
It's worth noting that AIS's index caps any single stock between 0.2% and 4.5% and rebalances in June and December. Today, SK Hynix, Micron and AMD all sit above that 4.5% line, likely because those stocks have gone vertical, doubling and tripling in a short amount of time, so they're temporarily above the caps before the next rebalance.
They'll probably come down then, though given the discretion the manager has, it's possible one or more of them could remain above the cap.
5 months ago
