BlackRock has unveiled a suite of funds for European investors seeking exposure to the rapidly expanding artificial intelligence (AI) value chain, investing in foundational infrastructure through to practical applications.
The launch of the BGF AI Innovation fund, the iShares AI Infrastructure UCITS ETF and the iShares AI Adopters & Applications UCITS ETF reflects BlackRock's belief that AI represents a long-term investment theme, capable of creating entirely new industries and accelerating scientific breakthroughs.
AI-related infrastructure investments, including hardware, cloud computing and chips, are projected to surpass $270bn in 2024, with long-term projections exceeding $1trn. Applications of AI, such as virtual assistants and automated business solutions, also present significant growth opportunities.
Tony Kim, head of the fundamental equities technology group at BlackRock, said: “We are at the dawn of an intelligence revolution.
“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 is BlackRock’s flagship AI thematic equity strategy, managed by Tony Kim and Reid Menge. The actively managed fund comprises a concentrated ‘best ideas’ portfolio of 20 to 40 stocks, targeting companies involved in various layers of AI development. These include infrastructure such as accelerated computing and cloud services, as well as applications like data software, and the fund’s approach allows it to pivot exposure as AI-related opportunities evolve.
Kim’s fundamental equities technology group, based in Silicon Valley, manages BGF AI Innovation. The team includes eight dedicated investors overseeing $24bn in tech equity strategies. Their investment process emphasises high-impact, targeted exposure achieved through company engagement and advanced data analysis.
The iShares AI Infrastructure UCITS ETF focuses on the foundational layers of AI technology, such as semiconductors, cloud computing and big data. The ETF tracks a benchmark index that identifies infrastructure specialists, value chain leaders and innovators with significant patent portfolios.
Comprising approximately 40 stocks, the ETF is listed on the London Stock Exchange (LSE), Euronext and Xetra with a total expense ratio (TER) of 0.35%.
The iShares AI Adopters & Applications UCITS ETF targets the upper layers of the AI stack, focusing on applications, services and solutions. The ETF includes companies from data-intensive industries such as healthcare, finance and mobility that leverage AI to enhance operations and deliver innovation.
The portfolio includes approximately 85 stocks and is listed on the LSE, Euronext and Xetra with a TER of 0.35%.