Data Now a Company Asset: An ETF to Make it Yours, Too | ETF Trends

In an increasingly digital world, data is becoming more valuable. Investors can tap into that theme with exchange traded funds like the Global X Artificial Intelligence & Technology ETF (AIQ).

AIQ seeks to provide investment results that correspond generally to the price and yield performance of the Indxx Artificial Intelligence and Big Data Index. The fund invests at least 80% of its total assets in the securities of the underlying index, which is designed to track the performance of companies involved in the development and utilization of artificial intelligence and big data.

AIQ YTD Performance

The AIQ thesis is gaining momentum as themes such as artificial intelligence, cloud computing, and cybersecurity become more prominent in daily life.

“With widespread internet connectivity we now live in a digital world where many of the world’s leading companies derive their value from virtual assets, namely data,” notes Global X analyst Pedro Palandrani. “High tech firms like those in social media, search, e-commerce, artificial intelligence, and cloud computing are in the business of monetizing proprietary data by selling hyper-targeted advertisements, recommending a new hit song or TV show, or anticipating our need to stock up on housewares.”

Big Data: A Valuable Commodity

Knowledge is power, and when that knowledge takes the form of data, it becomes the world’s most valuable commodity. As such, exchange-traded fund (ETF) investors should be keen to capitalize on opportunities in big data.

The use of big data won’t be relegated to just technology-focused companies. Its use will permeate into other sectors that can utilize big data to its fullest potential within their own respective business models.

“One key argument in favor of treating data as an asset is that companies have made significant investments in collecting, storing, and using their data,” according to Palandrani. “It is projected that total spending on big data and analytics could reach $274 billion by 2022. Accounting rules, however, do not treat data as an asset. Therefore, costs associated with storing and maintaining data is treated as expenses rather than capital investments, which depresses earnings and impact ratios like price-to-earnings (P/E).”

AIQ’s underlying index includes those involved in generating vast amounts of data and developing proprietary AI systems to derive actionable insights from the data set. The ETF will also cover companies that provide AI-as-a-Service for big data analytics or are developing hardware integral to powering AI systems, such as quantum computing.

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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