2025-06-20 14:37:00
Wall Street veteran Dan Ives has launched a new exchange-traded fund (ETF) focused on AI. Ives, a prominent tech analyst from Wedbush Securities, is known for his bullish outlook on the technology. This new offering, the Dan IVES Wedbush AI Revolution ETF, warrants a closer look in the increasingly crowded AI investment landscape.
Deciphering the Holdings
This ETF strategically invests in key AI players, offering a glimpse into Ives’s high-conviction picks.
- The fund heavily favors the “Magnificent Seven” tech stocks.
- It includes Taiwan Semiconductor Manufacturing, which is absent from the S&P 500.
- The portfolio also includes software companies and cybersecurity firms.
What sets Dan Ives’s AI ETF apart? The new ETF leans heavily into the world of artificial intelligence, with a focus on a concentrated set of holdings. The fund features major players and provides targeted exposure to the evolving AI space.
The ETF’s holdings are concentrated, with many of the biggest tech names taking center stage. The “Magnificent Seven” stocks, hold significant weight within the IVES portfolio. Each stock is weighted at 4% or more, and collectively make up just under 33% of the total. This mirrors the S&P 500, where these same seven stocks account for roughly 32%.
A notable addition to the IVES ETF is Taiwan Semiconductor Manufacturing. This company, while trading on the New York Stock Exchange, is not a U.S. company and is therefore ineligible for the S&P 500. Its roughly 4.7% weighting in the IVES ETF gives investors key access to a dominant player in advanced chip fabrication.
Beyond chip designers and large tech companies, the IVES portfolio invests in software companies focused on AI, including Palantir Technologies and Salesforce.
Focusing on Strategic Exclusions
Despite the importance of hardware in AI development, the fund excludes chip manufacturing equipment companies and electronic design automation firms. This approach suggests a focused, conviction-driven strategy rather than one aimed at encompassing the entire sector.
The ETF includes several cybersecurity firms like Palo Alto Networks, which comprise approximately 8.3% of the portfolio. Additionally, the fund offers exposure to smaller, AI-driven companies, such as Oklo and Pegasystems, that are not included in S&P 500 index funds.
Oklo operates in the small modular reactor field, which could see increased demand due to AI’s need for reliable energy sources. Pegasystems stands out with its GenAI Blueprint tool, which assists companies in applying AI to improve internal processes.
Costs and Potential Gains
When evaluating funds, the expense ratio is crucial. The IVES ETF has a moderate expense ratio of 0.75%, which is reasonable for an actively managed fund. The Global X Artificial Intelligence & Technology ETF charges 0.68%, and S&P 500 trackers can charge as little as 0.05%.
Investors are essentially paying for Ives’s active management and ongoing research. As AI trends change, the portfolio will evolve, offering a potential advantage over static index funds.
Is the Investment Worth It?
The IVES ETF does not offer a comprehensive allocation across all segments of the AI ecosystem, but it does represent Ives’s highest-conviction bets. Like any AI-focused ETF, IVES will be more volatile than the broader market. However, this volatility could produce significant returns over time.
Ives and his team will actively monitor the holdings, adjusting as needed. For investors looking to gain targeted exposure to AI with professional management, IVES presents a viable option. However, the low-cost Technology Select Sector SPDR Fund could potentially deliver similar or better results without the elevated fees.
Analyzing Risk and Reward: A Deeper Dive
The Dan IVES Wedbush AI Revolution ETF offers investors an opportunity to participate in the burgeoning artificial intelligence landscape. However, as with any investment, understanding both the potential risks and rewards is crucial. This section examines the volatility and the overall approach to risk management inherent in Dan Ives’s strategy.
The concentration of the IVES ETF in a select group of stocks, particularly the “Magnificent Seven,” amplifies both potential gains and losses. Investors should recognize that dramatic price swings are possible, as the performance of these companies will greatly influence the ETF’s overall value.
The expense ratio of 0.75% is a factor to consider; however, this cost is commensurate with active management, providing the benefit of professional oversight. Ives and his team will constantly refine the portfolio. They should change the holdings based on market changes and their analysis, which distinguishes this fund from passive index trackers.
Understanding Potential Drawbacks
investing in an AI-focused ETF involves accepting potential risks. A notable downturn in any of the fund’s top holdings could considerably affect overall fund returns. Moreover, because the ETF intentionally excludes some sectors, it is not a complete investment in all aspects of AI. Some investors might find the limited scope insufficient.
The fund also faces the risk inherent in any new technology: the possibility of disruption. Rapid innovation in AI could quickly render some of the fund’s holdings obsolete. What are the risks of investing in an AI ETF? these funds can be more volatile than broader market indexes as they are concentrated and subject to rapid technological change. Investors must be prepared for potential losses when market corrections occur.
Managing Risk
Prudent investors understand the importance of portfolio diversification. The IVES ETF might serve as one element of a broader investment strategy rather than the sole holding. Diversification can help mitigate the risks associated with concentrated investments.
Investors should continuously monitor the ETF’s performance and stay informed about the AI sector’s developments. Reviews of the portfolio should be consistent to incorporate changing market conditions and to match their investment objectives. This active engagement can help guide investment decisions, in line with personal risk tolerance.
Is the IVES ETF right for you? Assessing your risk tolerance and investment goals are critical before investing in this or any other focused ETF.Its wise to only invest funds you can afford to lose. Consider consulting a financial advisor to help tailor your investment strategy to your circumstances.
Table of Contents
