Investment giant BlackRock has recently announced significant enhancements to European investor access to artificial intelligence (AI) through the introduction of three new funds, underlining the transformative potential of AI as an “era-defining mega force” for economies and markets. This initiative aligns with BlackRock's view that AI will not only accelerate scientific advancements but also foster the emergence of entirely new industries, thus providing expansive opportunities within the full AI ecosystem.
In a detailed report, BlackRock asserts that investments in AI infrastructure—including hardware, cloud computing, and microchips—are anticipated to exceed USD 270 billion in 2024, with long-range projections surpassing USD 1 trillion. The firm also notes that AI-powered applications, which encompass a broad range from virtual assistants to automated business solutions, are expected to experience significant growth over the next decade. This scenario presents strategic opportunities for investors aiming to tap into the innovation and potential long-term value offered by AI technologies.
The newly launched AI suite provides a diverse range of investment options, allowing investors to tailor their exposure across different facets of the AI value chain. This suite includes the BGF AI Innovation Fund, the iShares AI Infrastructure UCITS ETF (AINF), and the iShares AI Adopters & Applications UCITS ETF (AIAA). Each fund focuses on distinct elements of the AI theme, with the BGF AI Innovation Fund managed by BlackRock’s Fundamental Equities Technology Group providing global exposure across the entire AI value chain.
Tony Kim, Head of the Fundamental Equities Technology Group at BlackRock, remarked, “We are at the dawn of an intelligence revolution,” emphasising the potential for investors to explore significant and often overlooked opportunities across the entire AI spectrum. The BGF AI Innovation Fund, a concentrated portfolio comprising between 20 and 40 stocks, specifically targets companies associated with various stages of AI development, spanning foundational infrastructure to advanced applications like data software. The actively managed fund adapts its exposure as the AI landscape continues to evolve.
The investment approaches adopted by the BlackRock’s team, based in Silicon Valley and accountable for managing USD 24 billion in tech equity strategies, employ a rigorous, bottom-up selection process reinforced by advanced data analytics and close engagement with companies to ensure impactful investment choices.
Manuela Sperandeo, Head of Europe & Middle East iShares Product at BlackRock, highlighted the transformation occurring within the investment landscape due to AI, stating, “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.”
The iShares AI Infrastructure UCITS ETF (AINF) is aimed at the foundational aspects of AI, investing in companies involved in key areas such as semiconductors and cloud computing. The ETF implements a distinctive multi-faceted methodology to provide comprehensive exposure to leaders in AI infrastructure and innovators with valuable patents, comprising approximately 40 stocks. AINF is listed on multiple exchanges including the London Stock Exchange (LSE), Euronext, and Xetra, with a Total Expense Ratio (TER) of 0.35 per cent.
Conversely, the iShares AI Adopters & Applications UCITS ETF (AIAA) targets companies operating at the higher layers of the AI stack, focusing on applications, services, and the integration of AI by industries such as healthcare, finance, and mobility to enhance operations. AIAA also employs a similar benchmark methodology as AINF, resulting in a portfolio of around 85 stocks and also listed on LSE, Euronext, and Xetra, maintaining a TER of 0.35 per cent.
Through these innovations, BlackRock is positioning itself to tap into the burgeoning AI sector, anticipating significant shifts in investment strategies and business practices as businesses increasingly adopt AI technologies.
Source: Noah Wire Services