High-conviction investing with ETPs - Artificial intelligence case study - Adopting a barbell approach with US Treasury ETFs

Oct 13, 2026

September 2023 edition of ETF Insider for professional investors focusing on high-conviction investing with exchange-traded products. Covers an artificial intelligence case study that outlines how ETPs can capture AI-related growth themes through broad-based, targeted, and leveraged exposures. Explores investment processes, portfolio construction with ETF allocations, and discusses issues such as consolidated tape uncertainty, fixed income allocation approaches, and the potential role of low-volatility ETFs.

LanguageEnglish

CategoryPresentations

FormatPDF

Pages3

Reading Time1 min

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High-conviction investing with ETPs

Capturing the artificial intelligence boom through ETPs

IMP AG's investment process (Chart 1)

Three-pronged thematic thematic investment strategy

ETF allocations: SMH, BOTZ, UBOT

Insider SEPTEMBER 2023|EUROPE'S LEADING ETF MAGAZINE FOR PROFESSIONAL INVESTORSHigh-convictioninvesting with ETFsArtificial intelligence:A case study7 Adopting a barbell approachwith US Treasury ETFs 13 Expert Investors:Nathan Sweeneyof Marlborough 20 Consolidated tape:'We do not know'if the EU's capital markets vision is viable26 How fund selectors are playingfixed income with ETFsE T F 40 A new era for low volatility ETFs?STREAM # High-convictioninvesting with ETPs Capturing the artificial inelligence boom through ETPs By Karin Wiederkehr&Stefan Wiederkehr rtificialintelligence(AI)hasundergonesignificantchangesin recentyears.Thistechnologyhasexperienced remarkableadvancements and is now being used commer-cially,whetherwe are fullyconscious ofitornot.Alisbeing appliedacross variousindustries soitisnotsurprisingthat the investment communityhasrecogniseditspotentialnotonly for applicationbut also asameanstogenerate returns.Thisthe-matic trendisoftenlikened toothertechnologicalrevolutionssuchasthewidespread availabilityofelectricity afterWorldWarIorthepublic adoptionofcomputers and the internet in the 199os and2000s.Inbroaderterms,the technologysectorisknownfor its consistentexpansion,developmentand continuous innovation. Alpresents bothopportunities andchallengesin many respects.To start,we turned to Google to define AIand IBM's website provided acon-cise explanation:“Atitssimplest form,artificialintelligence is a field that combines computerscience and robust datasets to facilitate prob-lem-solving.It also encompasses sub-fields ofmachine learning and deep learning,whichare frequently mentioned in relation to artifi-cial intelligence.These disciplines consist ofAIalgorithmsthat aim to create expert systemscapable of makingpredictions orclassificationsbased on input data." We also learned that AI aims to replicate hu-man actions and thinking and currently,themost well-known providerin the public domainis OpenAIwith itschatbot,ChatGPT.Accordingto Forbes,ChatGPT garnered one million us-ers within five minutes of its launch.Given thewidespread and rapid adoption,we reachedoutto ChatGPT directly to inquire abou the futureof AIinvesting. The response wasimpressive,covering1omajorrendsinsignificantdetail:"Increasedadoption,improved investment strategies,customisationandpersonalisation,riskmanagement andfrauddetection,speed and automation,explainableAI,regulatory considerations,ethical AI,inte-gration of multiple AI techniques and AI andESG investing." Aspreviously mentioned,the utilisation of AIhassurgedin recentyears,reinvigoratingstrate-gicinvestments in the industry.Since the end of2020,thebroaderinvestmentcommunityhadbeencautious about the technology sector,especiallytechmega-caps.Admittedly,theglobaltechnologyindustry'sperformance hasbeen relativelymod-est in the past two years.However,in2023,thisdynamicchanged dramatically,andtechnologyisonce againeverybody's darling.Returnshavenot only been exceptional year-to-date,but thetechnology sector,the semiconductor industry,and especially AI-related companies are poisedfor sustained growth. AtIMPAG,we recognised this opportunity atthebeginningoftheyearand tactically allocatedresources to this sector with a high-convictioninvestment approach.As with any investmentstrategy,it iscrucialthatclients'returnobjectives,preferred time horizon and risk tolerance alignwith the determinedassetallocation.Basedon information and our investment process,as shown in the graph-ic below,we identified three exchange-tradedproducts(ETPs)where valuations appearedparticularly attractive,given their potential tooutperform within the industry itself. A three-pronged high-conviction thematicinvestment strategy was implemented in dis-cretionary client portfolios with the intentionof maximising performance.Our strategy in-volved identifying a specific sector and regionand selecting a combination of broad-based,targeted and leveraged ETPs.To start,we opt-ed for a broad-based appro

FAQs

What approach does IMP AG use for high-conviction thematic investing with ETPs?

IMP AG uses a three-pronged thematic approach by selecting a specific sector and region and combining broad-based, targeted, and leveraged ETPs.

How is the high-conviction AI strategy implemented across ETP types?

The strategy starts with broad semiconductor exposure, adds an ETF benefiting from robotics and AI adoption, and complements it with a leveraged AI ETF to amplify returns.

Which ETPs are cited for the three-pronged AI-related ETF composition?

The document names VanEck Semiconductor ETF (SMH), Global X Robotics & Artificial Intelligence ETF (BOTZ), and Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares ETF (UBOT).

Oct 13, 2026

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