Today's market reminds us of 1999 in many ways. REITs were hated. Tech was loved. But afterward, REITs strongly outperformed. Here's why it could happen again.
CHAT offers focused exposure to the GenAI ecosystem, but concentration and sector risk are inherent to its thematic strategy. Portfolio holdings support CHAT for long-term AI growth, but recent performance shows inconsistent alpha versus broader tech ETFs like QQQ. CHAT exhibits higher volatility and sharper drawdowns than diversified tech ETFs, making risk management crucial for investors.
Liberation Day caused significant declines in global tech stocks, with major names like Apple, NVIDIA, and Amazon experiencing notable drops. The Roundhill Generative AI & Technology ETF was downgraded to a hold due to its improved valuation but remains risky with high volatility. CHAT's valuation has improved, with a P/E ratio dropping from above 23 to under 18, making it attractive for GARP and value investors.
ARCA Exchange | US Country |
The fund is an actively managed exchange-traded fund (ETF) that leverages the potential of artificial intelligence (AI) by focusing its investments on companies around the globe, including emerging markets, that are pioneering in the generative AI and related technology sectors. With an investment strategy that commits at least 80% of its net assets, in addition to borrowings for investment purposes, towards equity securities in AI and Technology Companies, the fund aims to tap into the rapid growth and transformative potential of the AI industry. It operates under a non-diversified status, meaning it may invest a larger portion of its assets in fewer issuers than a diversified fund.
Investing predominantly in the shares of companies that are significantly involved in the development, research, and application of artificial intelligence. This includes those working on groundbreaking generative AI technologies, which allow machines to create content and solve problems in ways that were previously thought to require human intelligence.
The fund also extends its investment to a broader category of technology companies, encompassing those outside the strict AI field but still integral to the technology and digital innovation sectors. This ensures a comprehensive coverage of the high-growth potential areas within the tech industry.
By not limiting its investment to a specific geographic region, the fund embraces a global approach, including companies from both well-established and emerging markets. This strategy aims to exploit the global nature of technological advancements and the widespread application of AI technologies across different countries and industries.