Invesco has unveiled a new series of thematic exchange-traded funds (ETFs) that focus on artificial intelligence, cybersecurity, and defense sectors. These funds aim to leverage emerging trends within these industries.
What Happened: The newly introduced ETFs, named Invesco Artificial Intelligence Enablers, Cybersecurity, and Defence Innovation Ucits, are based on benchmarks crafted by Kensho, a division of S&P Global Indices. Kensho utilizes natural language processing to pinpoint companies with significant involvement in each theme, categorizing them into “core” and “non-core” groups, Financial Times reported on Thursday.
As per Invesco, core companies generate a substantial portion of their revenue from products and services aligned with these themes, while non-core companies provide essential inputs without focusing on end products. The AI enablers strategy targets firms advancing AI technology and infrastructure, whereas the cybersecurity ETF invests in companies protecting enterprises from unauthorized electronic access. The defense fund provides exposure to companies developing advanced weapons and defensive systems
Here are a few ETFs and how they fared in the past year, as per Benzinga Pro:
Artificial Intelligence
- iShares U.S. Technology ETF ITW increased 45.40% over the year with holdings like Apple Inc. AAPL, Nvidia Corp. MSFT and Microsoft Corp. MSFT.
- Fidelity MSCI Information Technology Index ETF FTEC, with similar exposure, rose 43.17%.
- First Trust Dow Jones Internet Index Fund FTX, which gives exposure to Meta Platforms, Inc. META, Amazon.com Inc. AMZN, Netflix, Inc. NFLX, increased 45.59%.
Cybersecurity
- First Trust NASDAQ Cybersecurity ETF CIBR increased 38.08%. Its holdings include Cisco Systems, Inc. CSCO, CrowdStrike Holdings, Inc. CRWD and Broadcom Inc. AVGO.
- Amplify Cybersecurity ETF HACK rose 39.57%. Along with Broadcom, and Cisco, the ETF’s major holdings also include Palo Alto Networks, Inc. PANW, and General Dynamics Corporation GD.
- iShares Cybersecurity & Tech ETF IHAK with exposure to companies such as SentinelOne, Inc. Class A S, and Fortinet, Inc. FTNT, rose 33.95%.
Defense
- iShares US Aerospace & Defense ETF ITA with exposure to companies such as General Electric GE and RTX Corp. RTX increased 33.86%.
- Invesco Aerospace & Defense ETF PPA with exposure to companies such as Boeing Co. BA and Lockheed Martin Corp LMT increased by 43.05%.
- SPDR S&P Aerospace & Defense ETF XAR was up by 34.86%. It gives exposure to Axon Enterprise, Inc. AXN, L3Harris Technologies, Inc. LHX.
Why It Matters: The launch of these ETFs by Invesco comes at a time when thematic investing is gaining traction among investors looking to capitalize on specific industry trends. The focus on artificial intelligence, cybersecurity, and defense aligns with growing global interest in these areas, driven by technological advancements and increasing security concerns.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Image via Invesco
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