Ives AI Megacaps | Humanoids | Republican Deregulation | Texas HQs | Event Driven Hedge Fund Strategies
Ultumus has curated five new ETFs focused on several fashionable investing themes. Two major on technology while two are more driven by the potential beneficiaries of the current US administration’s political agenda in terms of deregulation across the US and a business-friendly home for companies in Texas. The last is completely different: a wager on a fund manager trading idiosyncratic corporate events that could take place in any industrial sector or region.
1. Dan Ives AI Megacaps (IVES)
Wedbush Securities tech analyst Dan Ives is famous for his colourful outfits and being a cheerleader for Tesla. Now Dan Ives Wedbush AI Revolution ETF (IVES) is the first ETF offered by Wedbush Funds, a new ETF provider which launched in 2024. It invests in leading edge AI firms powering the AI revolution. Most of them are well known US-listed megacaps and only two of the top ten holdings – Taiwan Semiconductor and Oracle – are not present in the top ten of the Nasdaq 100. If IVES does perform closely with the Nasdaq 100 its expense ratio of 0.75% seems expensive versus the QQQ costing 0.20%.
2. KraneShares Global Humanoid and Embodied Intelligence ETF (KOID)
KraneShares Global Humanoid and Embodied Intelligence Index ETF (KOID) also has a relatively high TER of 0.79%, but Nvidia is its only top ten holding overlapping with the top ten of the Nasdaq 100. It tracks the MerQube Global Humanoid and Embodied Intelligence Index and aims to exploit spectacular growth forecasts for humanoids (robots that look like humans): The Morgan Stanley Global Humanoid Model projects there could be 1 billion humanoids and $5 trillion in annual revenue by 2050. Less well-known tech names owned by KOID include electronic circuit board maker Jabil, Belgian semiconductor chip maker Melexis, Germany’s Infineon, and Australian rare earths producer Lynas.
3. Free Markets ETF (FMKT)
The Free Markets ETF (FMKT) wants to take advantage of the Trump administration’s deregulation agenda, which is regularly espoused by Treasury Secretary Scott Bessent and was aggressively pursued by Elon Musk at the Department of Government Efficiency (DOGE). It has highlighted four US industries as special beneficiaries of deregulation based on proprietary analytics. Banks will hold less capital and spend less on reporting. Healthcare can simplify billing. Energy can get faster permits thanks to Trump’s “Drill baby drill” promise. Transport can benefit from more flexible labour markets. The fund can also have up to 5% in Bitcoin and Ether ETPs. The ETF is unusually a collaboration amongst four asset managers: SYKON Asset Management, Point Bridge, TRM and Tidal. PointBridge also runs the MAGA (Make America Great Again) ETF, which invests in companies supporting the Republican party.
4. iShares Texas Equity ETF (TEXN)
Another ETF that appeals to advocates of smaller government has homed in on the reddest of red states - meaning Republican states in the US - Texas. iShares Texas Equity ETF (TEXN) simply tracks an index of companies headquartered in Texas, where lower taxes and more flexible corporate governance rules are luring a growing number of firms from the leading corporate US domicile of Delaware. The most famous recent mover is Tesla. Texas is now home to HQs for 55 Fortune 500 companies – ahead of both New York and California. The top ten holdings naturally include Tesla and Texas Instrument as well as three energy companies: Exxon Mobil, Chevron and Conoco Phillips. The cost ratio of 0.20% is reasonable for a specialist tracker.
5. Relay Race ETP (RRRR)
Rather than selecting specific geographies, sectors or companies, UK-listed Relay Race ETP (RRRR) from Leverage Shares trades a range of corporate events including capital increases, IPOs, M&A, changes in beneficial ownership, analyst reports, and quarterly and annual results. It is mainly long but can have some shorts. Management fees of 2.5% with a performance fee of 25% (above a 10% hurdle rate) are typical hedge fund fees - many times higher than the average for ETFs - but investors might judge these fees are worth paying if the manager can deliver strong returns in bullish and bearish market conditions. The website of Relay Race Investments shows that manager Christian Jesus Merino Madrid has indeed delivered huge returns averaging 70% per year with a low correlation to equities in recent years.