Even in the midst of a complicated market environment for growthy tech stocks, the future is still happening. Investors who want exposure to cutting edge technologies may be on the look out for a machine learning ETF like the Franklin Intelligent Machines ETF (IQM), which has notable exposure to key firms in the semiconductor supply chain.
It’s no secret that semiconductors have had an up and down year, including the U.S. placing significant new restrictions on selling advanced chip technology to China and the many semiconductor firms based there. But there are signs that the worst for the sector may be over following Warren Buffet’s Taiwan semiconductor stock buy.
One recent firm investors may want to keep an eye on may be ASML (ASML), the Dutch semiconductor company. The firm has plans to open a 16,000-square-meter facility outside Seoul in 2024, it announced last week, strengthening its relationship with key semiconductor-reliant companies in South Korea.
ASML’s back orders and overall pipeline may also bolster its dominant position in semiconductor construction, helping it ride out whatever interest rate and recessionary turbulence may be looming next year.
IQM has one of the largest weights to ASML among ETFs, with 4.8% exposure to ASML. The machine learning ETF is actively managed, investing in companies that benefit from machine learning advances such as robotics, data analysis, and driverless vehicles.
IQM charges a 50 basis point fee and has significantly outperformed both the ETF Database Category Average and the Factset Segment Average by at least 6%, returning 13.3% over one month compared to 2% and 7.2% respectively for its averages according to VettaFi.
IQM also holds some notable tech names like Apple Inc. (AAPL), Tesla Inc. (TSLA), and Intuitive Surgical, Inc. (ISRG).
Investors who are still looking for the right tech allocations have a lot of options to choose from, but IQM may be one worth following — the strategy stands to benefit from a semiconductor resurgence, and with strong active management from Franklin Templeton, the machine learning ETF may be one keep an eye on in the weeks ahead.
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VettaFi is an independent publisher and takes responsibility for our edit staff, research, and postings. Franklin Templeton is not affiliated with VettaFi and was not involved in drafting this article. The opinions and forecasts expressed are solely those of VettaFi and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
