Prominent Wall Street analyst Dan Ives, a frequent voice in financial media and an expert in disruptive technologies like artificial intelligence (AI), has launched the Dan Ives Wedbush AI Revolution ETF (IVES -0.04%). This exchange-traded fund (ETF) offers investors a disciplined, transparent way to access his high-conviction stock picks, focusing on 30 leading companies driving the AI transformation.
Over the past two decades, Ives has earned a respected reputation through bold, often accurate predictions on major technology trends, including bullish calls on companies like Apple, Palantir Technologies, and Tesla.
Can this history of success be translated into a winning investing strategy, and should you buy into the Ives ETF now? Here's what you need to know to make a more informed decision.
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What is the Ives ETF?
Dan Ives is a Managing Director and senior technology sector analyst at Wedbush Securities, one of the largest privately owned securities brokerages and asset managers in the United States.
Leveraging his experience and proprietary research, the Dan Ives Wedbush AI Revolution ETF is based on the flagship "AI 30 Research Report" produced by Dan and his team. This semi-annual publication identifies companies at the forefront of AI technologies, encompassing the development and application of systems that enable machines to perform tasks traditionally requiring human intelligence.
Recent advancements in the field are proving transformative to the global economy, ushering in a new paradigm of productivity and creativity by automating complex workflows and delivering predictive insights. According to Wedbush Securities, AI represents a $2 trillion market opportunity and a major secular growth runway for innovation leaders across AI software and generative AI, cloud infrastructure, specialized AI semiconductors, AI services, and related equipment.
The ETF is passively managed, meaning it's not necessarily intended to beat the market but instead provides targeted exposure to a thematic index based on a basket of stocks selected through a methodological approach. The predefined investing criteria include the following:
- Inclusion in the AI 30 report.
- Listed on a major U.S. stock exchange, such as the Nasdaq or New York Stock Exchange (NYSE).
- A minimum market capitalization of $250 million while meeting trading liquidity thresholds.
- Generates at least 50% of its revenue from AI-connected activities.
Additionally, the tracking index for this ETF features modified float-adjusted market capitalization weighting, with constituent weights capped at 4% and quarterly rebalancing.
High-conviction AI exposure
Despite economic uncertainties and U.S. trade policy shifts, the stock market's near-record highs are fueling optimism for further upside in AI stocks into the next phase of a secular bull market. The Dan Ives Wedbush AI Revolution ETF is well-positioned to capitalize on this momentum, with leading AI companies, including all "Magnificent Seven" stocks and other tech giants, underscoring its large-cap growth style.
Where this ETF stands out from the vast array of tech-focused ETFs on the market is precisely in its concentrated yet balanced positioning between both established leaders and emerging disrupters. The top five fund holdings, including Microsoft, Nvidia, Oracle, Broadcom, and Taiwan Semiconductor Manufacturing, contribute about 25% of the total weighting. Smaller AI stocks, such as C3.ai, SoundHound AI, Innodata, and Elastic NV, are also represented in the fund.
This creates a unique portfolio that captures the full spectrum of the AI investing theme, offering a distinct risk-return profile compared to more widely held ETFs.
The very early results are encouraging. Since the fund's inception date on June 3, the ETF has returned 3.4% through June 16, compared to a 1% gain in the tech-heavy Nasdaq-100 index tracking the Invesco QQQ Trust. This type of outperformance highlights the allure of the Dan Ives Wedbush AI Revolution ETF and helps to justify the fund's otherwise pricey 0.75% expense ratio compared to low-cost ETF alternatives.
The big picture for investors
While it will take several years of return history through various market cycles to gauge the effectiveness of this strategy, I'm bullish and expect the ETF to deliver positive shareholder returns over the long run. In my view, the fund is a great option for adding exposure to AI tech stocks without the complexity of individual stock picking and can tactically complement diversified portfolios.
