Wedbush launches Dan Ives AI ETF with a 0.75% expense ratio

(P1) Wedbush Asset Management has entered the thematic ETF space with the launch of the Dan IVES Wedbush AI Power & Infrastructure exchange-traded fund (ticker: IVES), carrying a 0.75% expense ratio that positions it as a premium offering in a crowded market.

(P2) "We are in the early innings of a 10-year AI revolution," Dan Ives, a managing director at Wedbush Securities, said in a statement. "This fund is designed to capture the companies building the foundational infrastructure of this technological shift."

(P3) The new fund will actively manage a portfolio of companies involved in AI infrastructure, including data centers, power grids, and related hardware. The 0.75% expense ratio is notably higher than the average 0.54% for actively managed ETFs, signaling a high-conviction strategy. The fund's top holdings were not immediately disclosed.

(P4) The launch of the IVES ETF represents a bet that investors will pay a premium for a curated portfolio in the booming AI sector. With Nvidia and other mega-cap tech stocks dominating existing AI funds, this new ETF aims to provide exposure to a different, more niche segment of the market. Its success will depend on whether its performance can justify the higher fee structure compared to cheaper, passive alternatives.

Thematic exchange-traded funds have seen explosive growth, with assets in AI-related ETFs crossing $10 billion in the last year. However, performance has been heavily concentrated in a few large names like Nvidia, Microsoft, and Super Micro Computer. The IVES ETF seeks to differentiate itself by focusing on the less-visible "picks and shovels" of the AI boom.

This strategy carries both opportunity and risk. While the infrastructure layer of AI is critical, it includes a diverse set of companies from utilities to specialized hardware makers, some of which may not have the same explosive growth potential as software or semiconductor design firms. The fund's active management will be critical in navigating this complex landscape.

This article is for informational purposes only and does not constitute investment advice.