BlackRock has expanded European investor access to AI, writing that ‘it is an era-defining mega force with the potential to reshape economies and markets through the launch of three funds that focus on the long-term opportunities in technology and artificial intelligence-related companies’.
BlackRock believes that AI has the power to change the global economy, accelerating scientific breakthroughs and creating entirely new industries – this will present a broad opportunity set across the full AI ecosystem, the firm says.
AI infrastructure related investments—spanning hardware, cloud computing, and chips— are expected to exceed USD270 billion in 2024, with long-term projections surpassing USD1 trillion, the firm writes. ‘Simultaneously, AI-powered applications, from virtual assistants to automated business solutions, are poised for substantial growth over the next decade, offering strategic opportunities for investors seeking innovation and long-term value’.
The AI suite is designed to provide investors with choice across investment styles and the ability to tailor their exposure across the AI stack – the value chain encompassing the infrastructure, tools and technologies required to build, deploy and scale AI applications.
The suite consists of the BGF AI Innovation Fund — a mutual fund managed by BlackRock’s Fundamental Equities Technology Group, providing global exposure across the full value chain — as well as the iShares AI Infrastructure UCITS ETF (AINF) and iShares AI Adopters & Applications UCITS ETF (AIAA). These ETFs offer targeted exposure to emerging opportunities in the AI theme, ranging from the initial infrastructure development, such as semi-conductors, to practical applications like image recognition and language translation software.
“We are at the dawn of an intelligence revolution,” says Tony Kim, Head of the Fundamental Equities Technology Group at BlackRock. “These funds can help investors seize outsized and overlooked investment opportunities across the full stack of AI and advanced technologies. The unprecedented rate of change in this new AI revolution poses unique opportunities for investors to seize.”
The BGF AI Innovation Fund, managed by Tony Kim and Reid Menge, is BlackRock’s flagship AI thematic equity strategy. The fund is a relatively concentrated “best ideas” portfolio, consisting of 20-40 stocks. The fund targets companies tied to one or more layers of AI development, including infrastructure such as power, accelerated computing and cloud infrastructure, as well as applications such as data software. The fund is actively managed to pivot exposure across AI opportunities as the theme evolves.
Based in Silicon Valley, BlackRock’s Fundamental Equities Technology Group consists of eight dedicated investors managing USD24 billion in tech equity strategies. The team carefully selects companies through a rigorous, bottom-up process enhanced by advanced data tools, technology, and close company engagement to ensure high-impact, targeted exposure.
Manuela Sperandeo, Head of Europe & Middle East iShares Product at BlackRock says: “AI is transforming the investment landscape, offering potentially unprecedented growth and innovation opportunities. We are committed to empowering investors with the choice to access these potential opportunities through the vehicles that work for them, whether that be mutual funds or ETFs.”
The iShares AI Infrastructure UCITS ETF (AINF) primarily focuses on the foundational layers of AI technology, investing in companies involved in semiconductors, cloud computing, and big data. The benchmark index uses a unique multi-faceted methodology to deliver comprehensive exposure to key players, identifying AI infrastructure specialists, market share leaders in the value chain, and AI innovators with valuable patents. The portfolio is composed of approximately 40 stocks, and the ETF is listed on the LSE, Euronext and Xetra with a Total Expense Ratio (TER) of 0.35 per cent.
The iShares AI Adopters & Applications UCITS ETF (AIAA) focuses on the upper layers of the AI stack, including Applications, Services, and Solutions, as well as AI adopters outside the value chain. AIAA specifically targets companies in data-intensive industries such as healthcare, finance, and mobility, which can use AI to improve their operations and services. The fund’s benchmark index follows a similar framework to AINF’s, focusing on market share leaders and innovators, resulting in a portfolio of approximately 85 stocks. The fund is listed on the LSE, Euronext and Xetra with a TER of 0.35 per cent.
