Quantum computer technology has made great strides in recent years and is becoming increasingly affordable to develop and build. That's good news because the demand for more powerful computing is ballooning with the expansion of cloud computing, the proliferation of digital devices, and the dawn of the AI era.
Quantum computing could emerge as a key technology and investment trend in the decades ahead. But because it's still in its infancy, the best way to invest in the industry could be via a quantum computing ETF.
What is quantum computing?
Quantum computers make use of superposition, which is the phenomenon that occurs at the subatomic scale where particles have no clearly defined state.
Harnessing the power of superposition dramatically accelerates computing speed and can help solve complex problems in the real world, such as coordinating logistics or simulating the structure of pharmaceutical products.
The advent of cloud computing has helped expand access to quantum computers, delivering computational power to researchers via an internet connection.
Exchange-Traded Fund (ETF)
Defiance Quantum ETF
NASDAQ: QTUM
Key Data Points
Company | Defiance Quantum ETF % Weighting |
|---|---|
Synopsys (NASDAQ:SNPS) | 1.9% |
Advanced Micro Devices (NASDAQ:AMD) | 1.8% |
Rigetti Computing (NASDAQ:RGTI) | 1.8% |
Coherent (NYSE:COHR) | 1.7% |
AIchip Technologies | 1.7% |
Oracle (NASDAQ:ORCL) | 1.7% |
Palantir Technologies (NASDAQ:PLTR) | 1.6% |
Teradyne (NASDAQ:TER) | 1.6% |
Lattice Semiconductor (NASDAQ:LSCC) | 1.5% |
Hon Hai Precision Industry | 1.5% |
Benefits of Defiance Quantum ETF
- It offers well-diversified exposure to the quantum computing industry before it gains widespread commercialization.
- The ETF invests in established semiconductor and software technology companies not solely dependent on the development of quantum computing, which could provide some stability to the fund's performance over time.
- In its short history, the Defiance Quantum ETF delivered a nearly 300% return, although this is attributable to overall growth in the technology sector rather than quantum computing specifically.
Assets Under Management (AUM)
Opportunities for quantum computing investing
Although there is only one quantum computing ETF available at the moment, there are other opportunities available for investors wanting to bet on the technology. IonQ was the first publicly traded pure-play stock in quantum technology. Bear in mind, this company is a start-up, though. It generates minimal revenue and currently loses money.
Likewise, the merger between Honeywell Quantum Solutions and Cambridge Quantum Computing -- now known as Quantinuum -- offers another opportunity for investors to get in on the movement early. Honeywell is the majority owner of Quantinuum.
Related investing topics
Why should you invest in Defiance Quantum ETF?
For investors looking to passively benefit from the development of quantum computing, the Defiance Quantum ETF is worth considering for the following reasons:
- Diversification: It's well-diversified across dozens of technology stocks.
- Lower risk: The fund won't implode if quantum computing never takes off, since most of these companies rely on established tech trends such as artificial intelligence (AI) and machine learning.
- Growth potential: The fund enables investors to participate in the upside potential of quantum computing and other major tech megatrends.
- Affordable: The ETF charges a reasonable 0.4% ETF expense ratio.
If you want in on quantum computing at an early stage, this ETF is a good place to start.
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