Roundhill Investments launch fund with generative AI

Major ETF firm, Roundhill Investments, have launched the first-ever exchange-traded fund made to track companies involved in generative AI technologies

ETF company Roundhill Investments has recently launched CHAT, the first-ever ETF designed to invest in the companies at the forefront of innovation in the field of generative artificial intelligence (AI). The company is to have an actively-managed fund designed to provide exposure to companies involved in the investment theme of AI, generative AI, and other such related technologies.

Through this development, Roundhill is clear in its strategy that AI will be one of the most “impactful technological innovations” for future decades, as the company believes it will continue to drive productivity growth across the global economy. 

US$7tn Global economic growth driven by AI by 2030

CHAT Key facts (as of June 2023)
  • Launched 18th May 2023
  • US$36m assets under management (AUM)
  • 1,275,000 outstanding shares
  • Current top holdings include: Nvidia, Microsoft, Alphabet, Baidu, Salesforce

According to the company itself, the total addressable market (TAM) for generative AI enterprise software is estimated to be around US$121bn. 

Roundhill Investments is a registered investment adviser and ETF sponsor focused on sector-specific investing. Its interest in generative AI comes in the midst of a large technological boom, which is fuelling somewhat of a revolution concerning how organisations handle and use data with the use of AI.

Roundhill Investment’s ETF is the first globally designed to track the performance of companies involved in generative AI. 

Its portfolio consists of globally-listed companies across various industries, including: companies developing, training, and commercialising large language models (LLMs), those that provide IT hardware tailored to generative AI workflows, enterprise software applications for business customers, and consumer software.

The company hopes that CHAT itself may provide exposure to companies developing or investing in B2C generative AI applications, such as Microsoft, Alphabet, and Baidu. In addition, it will offer opportunities with semiconductor providers focused on high-end performance AI chips, for example, such as Nvidia and AMD.

CHAT’s top current holdings include companies Nvidia, Microsoft, Alphabet, Baidu, Salesforce, and more. Nvidia in particular is the fund’s top holding at 8%, with shares up almost 42% over the past two months, with company stocks having soared 169%.

"Generative AI represents the next frontier of artificial intelligence technology, offering the potential to revolutionise industries such as entertainment, healthcare, and more. With CHAT, investors can gain exposure to this rapidly-evolving field, potentially benefiting from what we believe will be the exponential growth of generative AI technology,” said Dave Mazza, Chief Strategy Officer at Roundhill Investments.

"We had been hearing from investors for months that they were interested in investing in generative AI, but were frustrated by the lack of ETF options available to them. 

“Roundhill is excited to be able to meet market demand with CHAT, an ETF comprised of the companies pioneering what we believe to be one of the fastest growing technologies in history.”

According to CNBC, the CHAT ETF is up more than 8% since it started trading on May 18. It is now trading as $CHAT on The New York Stock Exchange.

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