It’s no secret that tech — and particularly AI and machine learning — are key market drivers right now. Last year saw AI push markets further across segments, with AI showing its potential outside of just generative text functions.
This year, however — especially amid concentration risk in those big tech firms — finding the best candidates for tech disruption can help set a portfolio apart. That’s where an active tech ETF like IQM comes in, with the fund sending a buy signal as of January 21.
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The Franklin Intelligent Machines ETF (IQM), launched in in 2020. Its fifth anniversary of inception will arrive next month. And it’s a member of a growing group of active equity funds. The active tech ETF seeks firms engaged in machine learning, including driverless vehicles, robotics, and more. Specifically, IQM uses a bottom-up approach, applying fundamental research to identify strong opportunities.
Charging 50 basis points, the strategy has returned 37.17% over the last one year. That was enough in that time frame to beat both the ETF Database Category and FactSet Segment averages. Perhaps more intriguing about the fund, however, is its recent tech chart activity. Per YCharts data, IQM is sending a buy signal. The active tech ETF’s price sits above both its 50- and 200-day simple moving averages. That, along with a healthy Relative Strength Index, which measures whether a fund is oversold or overbought, suggests the fund may be poised for a strong start to 2025.
The fund’s active approach is, perhaps, what makes its buy signal even more compelling. With markets expensive, an active approach to seeking potential tech industry leaders may appeal. What’s more, the flexibility inherent in an active wrapper can not only help with potential macro events, it can lean into high-conviction opportunities.
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