BlackRock has expanded its thematic ETF line-up in Europe with the launch of two new ETFs targeting long-term growth opportunities related to artificial intelligence technologies.
Manuela Sperandeo, Head of Europe & Middle East iShares Product at BlackRock.
The iShares AI Infrastructure UCITS ETF (AINF) focuses on foundational AI technologies, investing in companies specializing in semiconductors, cloud computing, and big data.
Meanwhile, the iShares AI Adopters & Applications UCITS ETF (AIAA) targets companies leveraging AI for innovative applications and solutions, particularly in data-intensive sectors such as healthcare, finance, and mobility.
Collectively, the funds offer exposure to the full artificial intelligence value chain, both the infrastructure enabling AI and its practical applications.
Both ETFs are priced with an expense ratio of 0.35% and are listed on the London Stock Exchange (in GBP), Euronext Amsterdam (in USD), Xetra, and Euronext Paris (in EUR).
Incorporating ESG screening, the funds exclude companies violating UN Global Compact principles, those involved in severe ESG controversies, and firms from controversial industries. As a result, the ETFs are classified as Article 8 under the EU’s Sustainable Finance Disclosure Regulation (SFDR).
Revolutionizing Global Technology
BlackRock underscores AI’s transformative potential, predicting it will reshape the global economy by accelerating scientific breakthroughs and creating new industries. AI infrastructure investments—including hardware, cloud computing, and chips—are expected to exceed $270 billion in 2024, with projections surpassing $1 trillion in the long term.
Simultaneously, AI-powered applications, ranging from virtual assistants to automated business solutions, are anticipated to grow significantly over the next decade, presenting strategic opportunities for investors.
These new ETFs are designed to provide tailored exposure across the AI stack, encompassing the full value chain of infrastructure, tools, and applications necessary to build and scale AI technologies.
Manuela Sperandeo, Head of Europe & Middle East iShares Product at BlackRock, commented: “AI is transforming the investment landscape, offering potentially unprecedented growth and innovation opportunities. We are committed to empowering investors with the choice to access these potential opportunities through the vehicles that work for them, whether that be mutual funds or ETFs.”
AI Infrastructure
AINF tracks the STOXX Global AI Infrastructure Index, selecting companies from developed and emerging markets with a minimum free-float market capitalization of $200 million and a three-month median daily trading value of at least $1 million.
The construction methodology starts with patent analysis sourced from Econsight which identifies companies with high-quality patents across the ETF’s three sub-themes (AI in big data, AI in cloud computing, and AI in semiconductors). High-quality patents are those in the top 10% for relevance (based on citations) and market coverage (measured by the countries covered).
After the patent screening, the methodology also uses FactSet RBICS data to assess revenue exposure to AI infrastructure industries.
Constituents are then classified into three categories: Pure Players (those deriving over 50% of their revenue from relevant industries), Innovators (those ranked in the top quartile by the number of high-quality patents across the sub-themes), and Market Leaders (those in the top quartile by market share for the sub-themes).
Constituents are weighted by float-adjusted market capitalization, with a maximum weight of 18% per stock. Companies appearing in multiple classifications have their weights aggregated.
AI Adopters & Applications
AIAA tracks the STOXX Global AI Adopters & Applications Index, applying the same rigorous methodology as the AI Infrastructure Index but focusing on seven AI application sub-themes: AI in Data Security, AI in Digital Products, AI in Energy, AI in Finance, AI in Health, AI in Industry, and AI in Mobility.