KOMP: A Play On The AI Industrial Revolution

seekingalpha08-06

S&P Kensho New Economies Composite ETF aims to capture firms transforming the global economy through innovation and digital technology.KOMP offers diversified holdings with no concentration risk, ...

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Teledyne Technologies Inc. is a global aerospace and defense electronics manufacturer as well as provider of sophisticated instrumentation, digital imaging products and software, and engineered systems to a number of industries. Parsons Corporation is a technology solutions provider focused on the defense, intelligence and critical infrastructure markets, offering a portfolio of advanced engines, cybersecurity solutions and other knowledge-based services. Bruker Corporation is a maker of scientific instruments used in molecular and materials research, as well as for industrial and applied analysis;","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4544":"ARK ETF合集","FDN":"First Trust Dow Jones Internet I","ARKK":"ARK Innovation ETF","BK4585":"ETF&股票定投概念","KOMP":"SPDR S&P Kensho New Economies Composite ETF","BK4588":"碎股","BK4550":"红杉资本持仓"},"translate_title":"KOMP：人工智能工业革命的游戏","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ARKK":1,"KOMP":1,"FDN":0.9},"content_text":"S&P Kensho New Economies Composite ETF aims to capture firms transforming the global economy through innovation and digital technology.KOMP offers diversified holdings with no concentration risk, including companies in alternative finance, digital health, and electric vehicles.KOMP provides a balanced exposure to established market leaders and emerging disruptors across various industries, outperforming high-beta sector companies like ARK Innovation ETF.   J Studios One of the main talking points you often here on financial media surrounds the idea that we are on the verge of a new industrial revolution, driven by advancements in AI which will transform every single industry. The challenge with this revolution? Knowing who the biggest winners will be (and no - it won’t just be Nvidia). It’s hard to identify and position into what eventually would be at the forefront of the revolution, but thankfully there are funds that can help do this on your behalf. That’s the goal of the S&P Kensho New Economies Composite ETF (NYSEARCA:KOMP). KOMP seeks to track the S&P Kensho New Economies Composite Index. This average includes US-listed securities that trade in developed and emerging markets throughout the world. KOMP aims to capture those firms whose products and services are transforming the global economy by harnessing innovation and the nature of digital technology – where creativity thrives through the strategic deployment of robotics, artificial intelligence, automation, and exponentially increasing processing power. Using a proprietary Natural Language Processing (NLP) algorithm, Kensho Technologies selects companies in the ‘New Economies’ subsectors, including alternative finance, digital health, electric vehicles and others, reflecting changes in the nature of disruption. Interesting idea overall in terms of identifying companies. So, does it work? A Look At The Holdings When we look at the top positions, we find a lot of strong diversification here. No position makes up more than 1.33% of the fund currently, making this a tech fund that does NOT have concentration risk like what we see in the Nasdaq 100 currently, for example.   ssga.com What do some of these companies do? Oceaneering International Inc. is a supplier of engineered services and products to the offshore energy industry with a focus on ROVs (remotely operated vehicle) and subsea hardware. Teledyne Technologies Inc. is a global aerospace and defense electronics manufacturer as well as provider of sophisticated instrumentation, digital imaging products and software, and engineered systems to a number of industries. Parsons Corporation is a technology solutions provider focused on the defense, intelligence and critical infrastructure markets, offering a portfolio of advanced engines, cybersecurity solutions and other knowledge-based services. Bruker Corporation is a maker of scientific instruments used in molecular and materials research, as well as for industrial and applied analysis; advancing scientific discoveries and technological advancements. And Coinbase Global is one of the most used cryptocurrency exchanges for trading cryptocurrencies that now also enables users to store their investments. All transformative companies? I’d say so. Sector Composition and Weightings I don’t ever recall seeing an ETF with diverse an industry group from a category standpoint.   ssga.com Application Software and Aerospace & Defense make up the largest allocations at around 9%. There’s a nice mix here which I really find intriguing and furthers the case that this is a nicely diversified fund overall. Peer Comparison One fund worth comparing this against is the ARK Innovation ETF (ARKK). Unlike the high-beta, high-risk, high-growth sector companies (e.g., genomics, fintech, next-generation internet) that make up the majority of the ARKK Innovation ETF, KOMP provides a more balanced exposure to established market leaders as well as emerging disruptors across a wider spectrum of industries with a more attractive weighting profile. When we look at the price ratio of ARKK to KOMP, we find that KOMP has meaningfully outperformed, again with a more attractive portfolio mix. stockcharts.com Pros and Cons On the positive side, the fund has exposure to a very well-diversified portfolio of companies that are at the forefront of the ‘New Economies’, namely those offering disruptive technologies to benefit from the enhanced growth rates of those cutting-edge businesses. The portfolio exposure is not biased by only one theme, making for a good balance between various ‘New Economies’ themes. I like the mix overall. But investments in global disruptive technologies will undoubtedly carry with them inherent risks, such as potential investments in the fund that may be in their earlier stages of business models and are usually highly volatile. Moreover, due to the rapid pace of technological change, there is a possibility that certain innovation or disruptive activities could be rendered obsolete or potentially disrupt entire industries, which could pose risks to the fund. More importantly, the fund itself could be affected by macroeconomic factors such as interest rate movements, geopolitical friction and regulatory changes, which might affect the outcome of new technologies’ adoption and commercialization. Conclusion  Overall, I think this is an intriguing fund. The mix is well diversified across stocks and sectors, and the screening methodology using AI does produce interesting results. Next Industrial Revolution? KOMP could be a good fund to play it. Just know that innovation and disruption sometimes take a lot longer to play out than the media would have you believe.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2457041373"}