Our Top 3 AI ETFs for 2024

Summary

In this video, hosts Adam and Victor explore the burgeoning AI ETF market, highlighting the potential of AI to revolutionize various industries. They discuss technological advancements, the impact of AI on sectors like pharmaceuticals and e-commerce, and the importance of understanding AI's role in different companies. The hosts compare three AI-focused ETFs, emphasizing the significance of top holdings, expense ratios, and the potential for growth. They advocate for a discerning approach to investment, suggesting that knowledge from their Alpha Quadrant framework can enhance stock selection and valuation skills.

Takeaways

• 🚀 Adam and Victor discuss their favorite AI ETFs, highlighting the potential for AI to revolutionize various industries like the internet did.
• 🌟 They mention technological breakthroughs in AI, such as the adoption of EVs and blockchain, and compare AI's broad impact to that of the internet on Cisco.
• 💡 Nvidia is positioned as a key beneficiary of AI advancements, providing essential GPU chips for AI's computational needs.
• 🔍 AI's influence is seen across sectors, including improvements in productivity with tools like Microsoft's CoPilot and Zoom's meeting summarization features.
• 🛠️ AI's role in the pharmaceutical industry is emphasized, with AI improving drug discovery success rates significantly.
• 📈 The potential growth of the AI sector is projected to be in the trillions over the next 5 to 10 years, indicating a massive market opportunity.
• 🤖 ETFs like Global X AI (AIQ) are identified as a way for investors to gain exposure to the AI market, with holdings in companies driving AI advancements.
• 𝄞 The importance of understanding the composition of ETFs is stressed, as some may not include companies at the forefront of AI, like Microsoft.
• 💰 The discussion points out the trade-off between ETF fees and the potential benefits of DIY stock picking, which can save on fees but requires more effort.
• 📊 Alpha Quadrant is introduced as a valuable investment framework for analyzing stocks and ETFs, focusing on business models and growth potential.
• 🔗 The presenters suggest that having a skill set in stock picking and valuation is beneficial, as it allows for more informed investment decisions beyond just ETFs.

Q & A

What is the main topic of discussion in the video?

The main topic of discussion in the video is the exploration of AI ETFs (Exchange Traded Funds) and their potential for investment in the context of the growing AI industry.

Why is AI considered a significant area for investment?

AI is considered significant for investment due to its wide-ranging impact across various industries, technological breakthroughs, and the potential for substantial growth in the coming years, as evidenced by companies like Nvidia benefiting from the AI revolution.

What does the acronym 'ETF' stand for and what role do they play in investment?

ETF stands for Exchange Traded Fund, which is a type of investment fund and financial product that is traded on stock exchanges much like individual stocks. They offer investors exposure to a diversified portfolio of assets, in this case, related to AI.

What is the role of Nvidia in the AI industry according to the video?

Nvidia plays a crucial role in the AI industry as they provide the GPU chips that are essential for powering cloud computing and enabling AI technologies, such as large language models.

What is the significance of the AI Revolution in the pharmaceutical industry as mentioned in the video?

The AI Revolution in the pharmaceutical industry is significant as AI technologies are being used to discover new drugs, modify molecules, and improve the success rate of drug discovery, with a reported increase in the success rate from 75% to 87.5%.

What is the difference between an 'enabler', 'engager', and 'enhancer' in the context of AI ETFs?

In the context of AI ETFs, 'enablers' are firms that create the hardware and software making AI possible. 'Engagers' are companies that integrate AI into their operations to create value and improve efficiency. 'Enhancers' focus on optimizing AI technology to help other businesses improve.

Why might an investor prefer to invest in individual AI stocks rather than an AI ETF?

An investor might prefer to invest in individual AI stocks for more control over their investment, the ability to select companies they believe will benefit most from AI advancements, and potentially lower fees compared to ETFs.

What is the Alpha Quadrant and how does it relate to the discussion in the video?

The Alpha Quadrant is an investment framework mentioned in the video that teaches investors how to analyze companies for growth potential and valuation. It helps investors make informed decisions about which companies to invest in, including those within the AI sector.

What are some of the key factors to consider when evaluating AI ETFs according to the video?

Key factors to consider when evaluating AI ETFs include the ETF's expense ratio, the top holdings within the ETF, the AUM (assets under management) size, and the ETF's historical performance.

How does the video suggest one should approach investing in AI ETFs or individual AI stocks?

The video suggests that investors should have a deep understanding of the companies within the ETFs or they are considering for individual investment. It also emphasizes the importance of using an investment framework like the Alpha Quadrant to analyze the potential for growth and to understand the valuation of the companies.

Outlines

00:00

🚀 Introduction to AI ETFs and Technological Advancements

The video script begins with an introduction to the topic of AI ETFs by hosts Adam and Victor. They discuss the significant role AI has been playing in various industries, drawing parallels to past technological breakthroughs like the internet and EV adoption. They highlight companies like Nvidia that are profiting from the AI revolution, and they emphasize the transformative potential of AI across different sectors, including its impact on productivity and cost savings. The hosts also mention specific AI applications, such as GPT and Microsoft's implementation of AI in Office, to illustrate the technology's practical benefits.

05:01

📈 AI's Impact on Industries and ETF Investment Opportunities

In this paragraph, the hosts delve into the potential growth of the AI sector, projected to reach trillions in value over the next 5 to 10 years. They discuss AI ETFs as a means for investors to gain exposure to this burgeoning industry. The conversation includes an analysis of the Global X AI ETF (AIQ), its asset size, top holdings, and the companies that are likely to benefit from AI advancements. The hosts also categorize companies into 'enablers,' 'engagers,' and 'enhancers' to explain their roles in the AI ecosystem and how they might be represented in AI ETFs.

10:01

🔍 Analyzing AI ETFs: Holdings, Performance, and Diversification

The hosts continue by examining various AI ETFs, comparing their holdings, performance, and diversification. They critique the Global X AI ETF for its high expense ratio and lack of certain key companies like Microsoft in its top holdings. They then discuss the I Shares US Technology ETF for its broader diversification with 131 holdings and a lower expense ratio. The paragraph concludes with an analysis of the Fidelity MSCI Information Technology ETF, noting its even lower fees and significant holdings in major AI-related companies.

15:02

💡 The Value of DIY Stock Picking Over ETFs for AI Investments

In this segment, the hosts share their preference for cherry-picking individual AI stocks over investing in ETFs. They argue that having the skill set to analyze and understand the underlying companies of an ETF can lead to better investment decisions. The hosts introduce their Alpha Quadrant investment framework, which they use to identify companies with high growth potential. They emphasize the importance of valuing companies correctly and understanding the business models and growth potential behind them.

20:03

🛠 Alpha Quadrant: An Investment Framework for Selecting High-Growth Stocks

The hosts elaborate on the Alpha Quadrant investment framework, which is open for enrollment until June 30th. They explain that this framework teaches investors how to pick stocks that can potentially grow exponentially over time. The conversation includes details about the benefits of the Alpha Quadrant, such as live webinars and the ability to differentiate between business models that can scale quickly and those that may not. The hosts stress the importance of investing in companies that are poised to benefit from circular trends and have the potential for significant returns.

25:05

📊 Conclusion: The Importance of Understanding ETF Components and Valuation

The final paragraph wraps up the discussion by summarizing the key points about AI ETFs and the importance of understanding their components and valuations. The hosts reiterate their preference for stock picking in the AI space due to the ability to handpick companies that meet specific investment criteria and wait for the right valuation. They encourage viewers to check out the Alpha Quadrant and to ask questions or provide feedback in the comments section. The hosts also remind viewers that the information shared is not financial advice but rather an educational discussion on investment strategies.

Keywords

💡AI ETFs

AI ETFs, or Artificial Intelligence Exchange Traded Funds, are investment funds that focus on companies involved in the AI industry. They provide investors with exposure to the AI sector without having to pick individual stocks. In the video, the hosts discuss their favorite AI ETFs and how they can offer a way to invest in the broader AI industry, which is highlighted by the reference to the ETF 'AIQ' and its top holdings like Nvidia.

💡Technological Breakthrough

The term 'technological breakthrough' refers to a significant development or innovation that brings about a substantial change in a particular field. In the script, it is mentioned in the context of the past 5 years, where breakthroughs like the mass adoption of electric vehicles and advancements in blockchain technology have occurred. AI is presented as the next such breakthrough, with wide-ranging implications across various industries.

💡Cloud Computing

Cloud computing is the delivery of computing services, including servers, storage, databases, and software, over the internet (the cloud) to offer faster innovation, flexible resources, and economies of scale. In the video, cloud computing is discussed in relation to AI, emphasizing the need for powerful hardware like GPUs to perform the intense computational tasks required for AI models, as exemplified by companies like Nvidia supplying these chips.

💡Large Language Model

A large language model is an AI system designed to understand and generate human language. The script mentions how such models have improved to the point where they can converse in a human-like manner, revolutionizing how we interact with data and technology, as illustrated by the chatbot example where it was previously a frustrating experience but has now become much more natural and useful.

💡

💡AI Revolution

The 'AI Revolution' is a term used in the script to describe the transformative impact that artificial intelligence is having across various industries globally. It is compared to the internet revolution, suggesting a fundamental change in how businesses operate and create value. The script discusses how AI is not just benefiting tech companies but is also being used in sectors like pharmaceuticals for drug discovery and in China for live streaming with AI-generated personas.

💡Enabler

In the context of AI ETFs, 'enabler' refers to companies that create the hardware and software necessary for AI to function. These are the foundational technologies that 'enable' AI applications to exist. The script mentions Nvidia as an example of an enabler due to its production of GPUs, which are crucial for the computational power needed in AI applications.

💡Engager

An 'engager' in the script refers to companies that integrate AI into their operations to create value, improve efficiency, and reduce costs. Engagers are businesses that actively use AI to enhance their existing processes and offerings. Examples given in the script include Alphabet, Amazon, and Tesla, which leverage AI to improve various aspects of their businesses.

💡Enhancer

The term 'enhancer' is used to describe firms that focus on optimizing AI technology and building upon it to help others improve. These companies are not just users of AI but also contribute to its advancement. In the script, Adobe and Splunk are cited as examples of enhancers, with Adobe's Adobe Sensei being a tool that aids designers in digital marketing and Splunk aiding in data analytics.

💡Expense Ratio

The expense ratio of an ETF is the annual fee that all investors pay for the operational costs of managing and administering the fund. It is expressed as a percentage of the fund's total assets. In the video, the expense ratio is discussed as an important factor to consider when choosing an ETF, with the Global X AI ETF having a higher ratio compared to the I Share US Technology ETF.

💡AUM (Asset Under Management)

AUM refers to the total value of assets that an investment manager manages on behalf of investors. It is an important metric to gauge the size and stability of an ETF. The script mentions AUM when discussing the Global X AI ETF, noting that its AUM is close to 2 billion, indicating its relative size in the market.

💡Alpha Quadrant

Alpha Quadrant is mentioned in the script as an investment framework or course that teaches investors how to pick stocks with high growth potential. It is positioned as a skill set that helps in understanding and valuing companies, which can be applied to both individual stocks and ETFs for making informed investment decisions.

Highlights

AI ETFs are gaining interest as AI technology expands its impact across various industries.

Nvidia's significant rise is attributed to its crucial role in providing GPUs for AI and cloud computing.

AI is set to benefit multiple industries, much like the internet did, not limited to a single sector.

AI advancements have made it possible to interact with data more naturally through large language models.

Microsoft has integrated AI with co-pilot in Microsoft Office to analyze large datasets.

AI is improving productivity in various fields, including pharmaceuticals and live streaming in China.

AI's potential in drug discovery has increased the success rate of FDA approval significantly.

Investing in AI ETFs provides exposure to the growing AI sector, with a market potential in the trillions over the next 5-10 years.

Global X Artificial Intelligence ETF (AIQ) has a focus on companies enabling AI through hardware and software.

AI ETFs categorize companies into enablers, engagers, and enhancers based on their role in AI technology.

Expense ratios and AUM sizes are crucial considerations when choosing between different AI ETFs.

I Share US Technology ETF offers a more diversified portfolio with a lower expense ratio.

Fidelity MSCI Information Technology ETF provides broad diversification with an even lower expense ratio.

Top holdings in AI ETFs should be analyzed for their direct benefit from AI advancements.

Investors should consider DIY stock picking combined with AI knowledge for potentially higher returns.

Alpha Quadrant investment framework teaches valuation methods and business model analysis for stock picking.

The importance of understanding the intrinsic value of ETFs and their underlying stocks for informed investing.

Transcripts

[Music]

welcome back guys my name is Adam I have

rusan Hello Victor hi everyone today

we're going to talk about our favorite

AI ETFs so AI is a big thing and a lot

of uh stocks like Nvidia going up all

the way to the moon and for some of you

who are looking into you know exposure

into AI ETFs or one way you can get

exposure to that so we're going to share

some of our favorite ETFs in this AI

space so before we jump into that want

talk a bit about AI so uh over the last

uh 5 years I think we've seen a lot of

technological breakthrough right I think

we have seen EV uh uh Mass adoption

there was in 2020 where you know Tesla

share price have gone up right

significantly and uh but they actually

benefited just Tes Tesla or certain one

one industry EV right and then of course

we have seen uh blockchain right and

then we have

metabus more more so a lot of this

breakthrough when it it needs a mass

adoption right but sometime certain

technology will only benefit the

industry but what we are seeing what I'm

seeing with AI is is going to benefit

across the industry just like how

internet actually benefited uh all of us

not just uh Cisco right Cisco used to be

the the initial know company that like

the backbone of the internet the

backbone of Internet of that time yeah

and they provided that like routers

switches all the networking equipment

which you know Empower us to use the

internet right so Nvidia is now at that

stage where they are benefiting a lot

from their AI because people needed the

GPU right the h00 chips right to power

the all this uh know cloud computing uh

and intense uh GPU performance they they

needed to do the large language model

right so but they are not the only

company that's going to benefit from AIS

actually right so uh in fact this

industry uh the AI Revolution I think is

going to empower or change industry

across the world right I think just to

give you some example I think if I think

just check G alone when it was launched

uh it was it is actually the first time

that we are able to talk to

data without going through a data

engineer or data scientist I think it

felt just so natural I think there have

been boxes chat uh Bots before yes but

they were terrible very terrible yeah

really when I remember when I start

using chat gbt I was like Wow because

previously there's really such s similar

system but then the their reply is like

what the hell is this yeah so this they

call it uh large language model or

natural language where they reply like a

human right so that actually change game

on how we really talk to data so and

that I mean people like like us without

any data engineer background we can

really like talk to data research a lot

of I know data without going to another

layer and that actually revolutionize

the whole industry subjectivity I think

we all can see it how powerful it can

get right so it can help us uh craft an

email right do a lot of stuff right on

on CH gbt uh but still can't recommend

stock

yet okay so that's why you still need to

watch this channel so and then of course

uh I mean Microsoft themselves they

actually implemented co-pilot on the

Microsoft Office so if you have actually

use copilot you can actually use

Microsoft Excel to help you analyze uh

tropes of data that you have in the

Excel spreadsheet right so copilot can

actually help you to do that uh and of

course uh if you use zoom right I think

they also able to summarize the meeting

the minutes of the meeting itself right

so they actually improve a lot of

productivity that we get out of this Ai

and that will help company to save on

cost because they improve the

productivity alone right so that kind of

massive benefit that we are seeing and I

think in the pharmaceutical industry

also you actually see AIS are actually

being used to discover new drugs they

are able to modify certain molecules

right I mean the AIS themselves can

actually do that and uh and based on the

stats that I've seen I think that

actually improved the success rate but

by up to I think go up to SI high is

about 87% 5% right but in the in the

past before that was I think 75% on

average the uh drug Discovery when they

uh successfully go through FDA approval

phase one the success rate is

87.5% versus 75% that's a huge jump for

the pharmaceutical industry all right so

uh and of course in China we also see AI

is being used uh live streaming live

streaming is very popular in China right

so uh the e-commerce Market over there

and they I think recently I think we saw

in April uh they actually uploaded a

photo of Richard Le mhm and he become

the guy that doing the live streaming

okay but actually that's not actual

Richard Le right it's just a photo of

him and then they use uh gen AI to

actually Empower this photo to do live

streaming and people it went viral in

China okay all right so and you can

actually I can go on with different

industry but I think you get to see that

you know AI Revolution is not just going

to benefit companies of nvida it's going

to be across different sector right so

uh and if you look at a lot of research

or forecast how AI is going to the whole

sector is going to grow it's in trillion

right so uh and that is over the next 5

to 10 years so it's going to be exciting

time uh but that's where I think AI ETFs

come into the play and that's why we

have this uh round table and how do you

actually position yourself from this um

you know revolution of AI right so what

companies to look out for and ETF is

just one of the good ways for you to get

exposure into that and and of course if

you go and dig the AI ETF out there uh

ETF database will tell you that there

are 39 ETFs in the us alone that talk

about or focus on AIS right so uh so

which one do you choose yeah Y and the

most obvious answer is that people look

at oh the ETF with AI name on it right

so like this uh aiq right Global X

artificial intelligence and then they'll

tell you oh how big the market is going

to grow for AI itself what are the

benefit of investing this ETF blah blah

blah right so this AI aiq itself I think

the AUM size the asset size is right

right now is about close to 2 billion

and if you look at the top 10 Holdings

they have uh companies like Nvidia which

currently benefited from this uh um ai's

Revolution uh because they are the

backbone of this uh AI right so and they

have this Transformer model right so you

look at Nvidia they sell the gpus right

so the people are ordering a massive

tons of GPU look at how much um billions

of dollar that meta is spending on GPU

all the big Tech Guys right so this guy

side you look at Shai has gone up a lot

right and they also have Holdings in

tensen which also um um benefited from

AIS because tenen has their advertising

segment where they actually use AI to

help to improve the ads targeting y

right so that will help improve the

return investment for the merchant and

when the merchant seei on their adverti

advertis advertisement they will spend

more similar to meta similar to meta

right so they also have holding on meta

right so they these two actually

benefited from a I think I think I want

to give a context on uh how this

actually companies actually go into the

ETF right because some of the company

maybe you see are you sure this AI yes

right so I think for the AI ETF right I

think mostly they focus on three

category right the first one is what we

call the enabler which is like uh those

firms that creates the hardware the

software that makes the AI possible so

like you got your Nvidia the GPU chips

right your Intel Micron uh Microsoft

which is they got the cloud structure

and also they got the uh their operating

system so that that is the enabler then

after that you have the engager right

the engager is basically uh companies

right to integrate AI into the operation

to you know uh create value improve

efficiency reduce cost right so you have

like alphabet Amazon and Tesla then

finally the last one is what we call

enhancer so enhancer this this firms

like they focus on optimizing the AI

technology that that they buil upon

their own AI to help other people to

improve right so you have like uh Adobe

right they I think they have this new

Adobe Sensei or fire flight which help

which help the the designer to you know

to do like digital marketing or what or

if you have like example Splunk right to

help to do data analytics and all this

so these are called enhancer okay so

actually some companies could actually

fall in two or two or three just one cuz

like alphabet is in I would say is an

enabler as well because of it en hyper

scale

so as long as they are in one of these

three category the AI ETF will go and

buy them okay yeah yeah so again uh then

of course you have Netflix also I think

this also a beneficiary from AI they

actually U engager yeah so they helps to

uh personalize the kind of show that you

like recation engine yes and that will

enhance the stickiness of user on the

platform they will stay with them so

that reduce the CH rate they saying I

think Hollywood some Hollywood people

were saying that in a few years or how

many years later you're going to have ai

creating movies oh all by themselves

yeah that that probably will be

something that would be mindblowing but

that's something that Netflix could

actually get behind benefit get that

will definitely reduce their cost

because now they are spending a lot

doing the movies right before that they

are cash flow a few cash flow gener but

after they start movie production that's

where they spend lot money but that to

go through

I so far how would an AI actually like

film a whole movie you never know never

know you never know yeah but this is is

how potential of

things can come out with movie script

now I mean I don't know how good it is

but the the good thing about AI is right

when we see now we know that it's going

to for adoption right it's different

from metav the point of time when metav

was wow it's very good very good but at

the point of time it's still not that

mess it's cool but you don't know how

you're going to use it

correct I could use things yeah so I

think again back to how do you benefit

from this AI right so the so usually we

look at the top 10 Holdings to get an

idea whether this ETF is really like

benefiting from AI right so by looking

at certain companies I think we can

really tell right so I think I was like

talking about Netflix and then of

alphabet which which you also mentioned

they do have the cloud right where a lot

of now gen all the chbt or Gemini that's

happening is actually through the cloud

and it alphab have the uh Google Cloud

right which you needed to process all

this computational and they have all

this GPU CH built into the data center

right so they also one of those company

that I think is going to benefit from

this Ai and qualcom right chips broadcom

uh and of course Oracle and Alibaba so

which Al Another Crow providers and they

also benefiting from AI itself right so

look at the top 10 holding itself oh

this really artificial intelligent is

really like okay they are they have the

right Holdings over there but they still

have some missing uh companies over

there right so I look at Microsoft hey

look Microsoft is one of those companies

that have like profit sharing with on

the chat gbt which is open right but

it's not inside maybe it's part of the

top 88 Holdings which this fund actually

own right so um and it's not the top 10

it's not in the top 10 I want Microsoft

to be my top 10 right so this probably

will be out okay for me right and on top

of that the expense rati is about 0.68

pretty high it's slightly on the high

side but it's still cheaper than h f 2%

1% uh but on the high side and then net

value is quite considered quite low for

the net about 1.94 billion yeah about

two billion yeah so yeah so this one

okay is AI ETF but I look at the

combination M it's not that ideal for me

okay then of course we move on right we

have this I share us technology ETF they

don't call themselves as like AI ATF but

if you look at the top 10 Holdings that

they have okay this one is a lot more

Diversified they have 131 holding versus

88 Holdings for the global uh X

artificial intelligent ETF right so uh

but if you look at the top 10 Holdings I

think this one is a lot more interesting

you have Microsoft on the list oh that's

about 18% right some of you may not be

comfortable but uh you don't have to

have just stick to one ETF right you can

have many ETF right so but uh Microsoft

is one of it and then Apple about close

to 15% mhm and apple they are I never

really he much about recently there's

been some news that's coming out so WWDC

they have been announcing a lot of AI

features right that we're going to get

and they work with chat GPT so to me

Apple is pretty much lagging behind but

they still own the platform the

operating system which I think pretty

much all may still use it uh use apple

to do you know gen AI kind of thing

stuff artif I think that's the thing

with apple is that they tend to take

their time with new technology yes and

then once it's like more concrete and

then they then they start implementing

it into the entire base so right now

we're just seeing gen

emojis where you use AI to create emojis

which is such a like a nothing thing you

know but it's funny seems like you can

use to create a lot it was quite cute I

watch I saw a video on that but anyway

yeah that's about but yeah so apple is

really like not the ahead of the curve

in term of AI but they may still

benefited from AI itself just it's not

still not very obvious uh right now to

me right Nvidia of course there that's

also a good position there meta is also

benefiting from it broadcom alphabet

Salesforce alphabet AMD Adobe I think

all these are PR point right so uh but

it's quite decent right they have about

100 over Holdings and if you look at the

expense ratio it's about 0.4% which is

slightly cheaper

the

global right so this is a good

alternative actually look at it and you

look at the last five years performance

I think they have done pretty well uh

about

23% on a year-to-year basis very

impressive so 23% perom average yes

annualized yeah so I think largely

because maybe they have high Holdings in

Microsoft right uh Nvidia mea which

actually benefited a lot right but you

look at the U Global X artificial

intelligence uh they do have some those

Chinese attack like and Alibaba that may

have Dr down performance and they have a

smaller Holdings in the Nvidia Amazon

it's a lot more uh Diversified even

though they only have 88 Holdings but

each holding they actually does not

exceed uh 5% some people are comfortable

with it so the waiting is more equal

more equal yeah but uh I share ETF I

think they have more uh concentrated but

although they have like oh 100 over

Holdings right but they are top 10

Holdings are more concentrated right and

then of course uh this is could be a one

good alternative even though they don't

say uh themselves as AI ETF it seems

like maybe it's like a tech ETF that

happens to have ai yes boost boosted by

AI they are leading the the industry

right so and a lot of these companies

that in their top 10 Holdings have that

AI impact okay but of course most of the

time when you talk about AI usually yeah

correct so so indirectly they are

building a AI okay yeah and of course

then the third one that we have will be

the the Fidelity right so msci Fidelity

msci Information Technology ETF okay

right so this ETF uh I think if you look

at this is also even is more Diversified

they have like 300 Holdings wow okay so

uh but top 10 uh Holdings that they have

uh is they have Microsoft Apple Nvidia

pretty similar to uh What iare uh us

technology TF owns right and then Brom

Salesforce AMD Adobe right Oro 6 very

similar right so this company again they

are in the good position to benefit from

artificial intelligence right Revolution

so um and the fee zoning comes in at

about uh

0.08% that's even lower than the

Spy put it that way yes yeah and of

course is even lower than the ISA us

technology yeah at 0.4% right and the

AUM size you will compare to the I share

is about 16 billion M right and this

fality they have this a AUM size about

close to 10 uh billion okay which is

actually smaller smaller okay so it's

not as big as the AA one yeah AA is

actually the largest one of the largest

right and then followed by Fidelity

right so fality but their fees are a lot

cheaper and I think over time fality

might get more inflow of funds coming in

right because of the very similar in

term of the holding right of course uh

these are we are just focusing on the

top 10 Holdings uh and they still have

like you know uh 90 Holdings that we

don't go into that right but this is how

the rest of it you can only trust that

ATF provider that you know they actually

doing the right selection for you yeah

that's how you usually approach when you

buy ETF you are basically you know

relying on them to pick for you yeah

yeah but I think you also need to take

note that the fality and the I share

they are top three Holdings which is

Microsoft Nvidia Apple account very

close to about 50% of the the whole the

whole portfolio so it's still very

concentrated on these three companies

yeah so I think that's the good thing

about knowing these things because some

people go oh I just buying ETF I'm done

with it but actually there's a lot of

yeah some lay layer of analysis that you

need to go through to actually figure

out actually whether this is ATF makes

sense for me and my financial goal some

people cannot be may not be comfortable

with 50% concentration in this three

stocks even though they are the big know

Microsoft and video and stuff like that

and someone could be more comfortable

with the the ETF that has more equ

waiting you know spread out across

across uh different uh companies that

way yeah so but it's but is a small very

small ETF it's a smaller ETF so these

are the things that you need to weigh

and not just like oh I'll just buy an

ETF cuz actually the things that you

need to consider consider expense ratio

tracking error stuff like that yeah yeah

but based on Last 5 Years uh I share US

tech ETF and Fidelity One actually

perform pretty well I think about

22% for uh 23% on average year on Bas

Nvidia is this all Bo

and they higher concentration in

Microsoft right and Nvidia versus like

Global X artificial intelligence which

have lower concentration in each stock

all right so some people may comfortable

with it but the performance for Global X

aitf I think is only like comes in about

14% which is pretty good still okay

right uh yeah so um so which one it's my

favorite um the one with the lowest

cost but you still need that decent AUM

size uh to make sure that ETF doesn't

close down okay okay so uh in fality I

think they have close to 10 billion AUM

I think is pretty sizable yeah it is

yeah and of course if you want biggest

one uh IA us ETF which is going to be

more liquid for sure right we compared

to fality and because the a size is

about close to 16 billion yeah and

precisely because it the global X is so

small in terms of the fund that's why

the expense ratio is the highest MH

right if not the the F manager probably

don't to do typically ETF grows bigger

they can

SC lower the fees if they want to so you

know looking at all this I think is it

easy for you to kind of like go through

the ETS because you kind of know these

companies yeah and you know how to

analyze them already so that the skill

comes in handy and I think the fact that

we have already have our investment uh

process and we have also spent amount of

time that looking some of this company

that's why when I look at sou some of

this ETF it's a lot easier for me to

like you know understand oh this one yes

this one fit into the top 10 right and

now this one there's something missing

like I say right so how come Microsoft

is is not inside that Global uh X AI

right because they are the Forefront of

AI and they're not inside yeah and this

of course uh uh it comes from the

framework that we already have and we

have been uh learning right which is why

we call it as Alpha quadrant right and

of course with this skill set Alpha

cordant on how we analyze companies

actually helps us to appreciate uh

better by selecting some of this ETF

itself yeah yeah so it's not just about

using so if you you're interested to

find out more about Alpha C is actually

open right now as of I mean I don't know

when you're watching this video but as

of now till the 30th of June so at 30th

of June uh end of uh the month uh we

open for enrollment to join Alpha CAU

where you can learn how to use this

investment framework to pick stocks you

know can grow three times five times

based on the business model and their

growth potential so these are the things

that we're going to look out for and at

the same time when we learn all these

things we can apply it to ETFs as well

because then you can understand the

individual components of the ETF and say

actually that's not so good yeah or this

is this is pretty good and then you kind

of fit the ETF to what you actually what

you're looking for so in the end I think

for us uh we don't invest in any of the

CDF okay uh we rather cherry pick some

of these uh stocks that is going to

benefit directly from the AI Revolution

uh and Alpha Cordon help us to go

through that process on analyzing those

that company for example Microsoft when

I analyze that Microsoft and say hey

look this is one of the company that's

going to benefit a lot not just NV right

MVD of course is a direct beneficiary

right now but over the mid to long term

I think Microsoft will gives you that

sustainability of earning growth right

that going to be a big compounder over

time right so Alpha quadrant will comes

in and then help us to to do that right

and that's basically uh how we use it to

find you know companies that multiply

over time and then we want to uh put

more heavy weightage on these companies

okay so yeah yeah and there zero cost

yeah to that it's true because if you

ETF there's some fees if you do it

yourself basically DIY you save on fees

uh but then you get to pick you

basically get to pick your own ETF in a

sense almost like you pick your own

portfolio pick the companies that you

want to form the ETF which is going to

be your main portfolio so right but that

takes effort or of course time also yeah

so it's not something that oh you come

in and oh you can C thatf right but it's

a very useful skill it's a life skill

actually so if you're interested to know

more about Alpha Quon you do do check

out our website alcon.com it's open

until 30th of June uh and we open for

enrollments and then of course you get

to you know go through the entire course

where we teach you this investment

framework to find all these kinds of

companies with growth potential and of

course uh we also have life web classes

correct where Victor and rusman going to

spend an entire afternoon with you live

online uh going through the key topics

that you need to know come almost like a

crash course and uh you can apply to

your portfolio straight away right and I

think most importantly we also going to

share with you how do you actually

differentiate different typ business

model that can scale a lot more quicker

versus this company that can't scale or

maybe in the sunset industry okay so

these are the things that you need to

really learn and make sure that you

invest in those company that is going to

benefit uh from certain circular Trend

okay all right and then you're going to

see your companies grow multiply in term

of return over time I mean this was a

question I was going to ask you so you

feel it's better to pick your own like

AI stocks rather than go with an ETF um

if I'm lazy I'll just go for the ETF

right fality for example uh but now

because I have that skill set knowledge

which will be a lifetime skill that you

be really useful and it helps me to

appreciate why I invest in certain ETF

uh so that is a very important skill

right so I will still pick my own stocks

okay right because that is like a hobby

a passion I would say right and uh

partly also because of the investment

experience that we have built over time

okay yeah would you also say that

because maybe in the in the area of AI

maybe it's not so clear yet cuz like you

go if like S&P 500 oh it's established

everyone knows if you buy that it's the

whole almost the entire US economy but

when it comes to a new growing sector

like AI sometimes maybe the ETFs are not

so clear like which one yes has the

right Holdings you know or they not

establish am is not big enough what do

you think about that yeah yeah I think

the TR record is still very short for AI

okay AI company okay and also you must

know that when you buy into the AI ETF

you don't know what's the valuation

right so at the end of the day if you

can buy at the with whatever asset you

can buy at a good price I think even you

buy a l now there's still possibility

that you make money right but if you pay

for expensive price in terms of the

value definitely the probability of

losing money is very high so so at the

end of the day you also need to learn

how to uh look at the ETF and to see

what's the exact value at a part of time

yeah for individual company why we pick

because we we know how to Value the

company right we we do teach in Alpha

quadrant that how how what's our

valuation method we do and how do we see

how do the valuation methods connects

back to the business model the business

situation the history the the possible

Futures and all this so it's not just

plain you know valuation value like that

but you have to really link back to the

business okay and also the management

right how the business and management

plays a role right will determine how do

you value the the company yeah and why

we look at don't look at Tesla for

example okay okay so yeah so how do you

calculate intrinsic value whether it's a

good time to invest in the certain stock

right now some some stock in the AI

index are really expensive right some

are not all right so this is where Alpha

cor comes in really helps you to go go

through that process yeah okay so just

to summarize these are the three ETFs

that we've like kind of like picked out

uh i w i iyw then the ftech and then the

aiq so I'm just giving the ticker

symbols right now you can do you can

check them out for yourself I think it's

a good uh you know exercise to have a

look at you know the ETFs you know what

the expense ratio are the top 10

Holdings especially because if you buy

an ETF you actually the underlying you

know Securities are these stocks and you

should actually go through and actually

understand what these companies are and

what you're buying

and I think the point you made about

valuation is very important as well

because a lot of times when people talk

about ETF they don't seem to talk about

valuation because I think I mean fair

enough a lot of them have a DCA strategy

into like the you know the that's a

broad based index broad from thematic

IND corre ETF sorry yeah correct so

that's a good point because valuation

comes into play as well yeah and then

the question goes how do you value an

ETF and then that actually balls down to

how do you actually value a stock

because that's why it is yeah so we

actually teach all these things in Al if

you're interested to find out about that

as well so anything else you know you

want to share about these uh ETFs uh

anything else uh not really yeah okay

yeah so again this is not a

recommendation to buy or sell these ETFs

you just want to pick them out so two of

them are kind kind of the biggest ones

in this space as well the other one AQ

is a bit smaller uh but also pretty

focused around yeah and stuff like that

so go over to the lowest expense one

yeah just when it comes to e just go

with the cheapest I mean just the cheap

one of uh it's a bigf as so again do

check it out for yourself if you want to

again no recomendation yourself and ETF

is just one strategy to get exposure

into a particular sector you know if

you're not so into stock picking but for

us we prefer stop picking in this in

this space y yeah cuz then you can pick

the best ones you feel fit your criteria

yeah Y and then of course you wait for

the right valuation as well yes all

right okay so if that you know if you

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grow three times five times over the

next you know X number of years and how

do you actually have an investment

framework that teaches you how to value

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