Krane Funds Advisors (KraneShares) has introduced a new thematic equity ETF targeting companies worldwide that are leaders in developing and applying artificial intelligence (AI) technologies.
Brendan Ahern, CIO of KraneShares.
The KraneShares Artificial Intelligence & Technology ETF (AGIX US) has been listed on the Nasdaq Stock Market with an expense ratio of 1.00%.
The fund is linked to the Solactive Etna Artificial General Intelligence Index which includes companies with a primary listing and headquarters in developed markets. Eligible firms must have a minimum free float market capitalization of $2 billion and a minimum average daily value traded of $2 million.
The selection methodology is designed to identify companies with significant business exposure to the AI sector, including AI hardware, AI infrastructure, and AI applications. To be included, companies must be classified under specific FactSet Industries related to AI and are further assessed using a proprietary AI Exposure Score. This score evaluates each company’s relevance to and readiness for artificial intelligence technology.
The AI Exposure Score prioritizes companies developing semiconductors and data centers crucial for large language models, firms providing cloud and data services for AI training and deployment, and businesses leveraging AI to enhance efficiency, reduce costs, and improve customer experiences. According to KraneShares, this approach provides comprehensive exposure to the AI value chain, from foundational technology to practical implementations across various industries.
Index components are weighted by category: AI Applications (20%), AI Hardware (40%), and AI Infrastructure (40%). Within each category, weights are determined by a combination of free float market capitalization (30%) and AI Exposure Score (70%). No individual stock in the index exceeds a maximum weight of 10%.
The index is reconstituted and rebalanced quarterly.
Brendan Ahern, CIO of KraneShares, commented: “AGIX seeks to provide strategic access to the future of artificial intelligence, capturing the full spectrum of the AI value chain from hardware to infrastructure to applications. With the potential to add trillions in annual value across various sectors, generative AI is poised to be a transformative force in the global economy, and AGIX offers investors a way to participate in this technological revolution.”
Derek Yan, Senior Investment Strategist at KraneShares, added: “AI technology has recently come of age with the advent of ChatGPT and other generative AI applications. Investor excitement for generative AI stems from its unprecedented consumer adoption rates and its potential to automate up to 50% of today’s work activities between 2030 and 2060 according to McKinsey & Company. AGIX aims to track the companies at the forefront of this transformative technology.”