Investment companies with exposure to generative AI
There are 20 AIC investment companies set to benefit from generative artificial intelligence (AI).
The Association of Investment Companies (AIC) has released a list of 20 AIC member investment companies with exposure to 18 underlying companies set to benefit from generative artificial intelligence (AI).
The list of 18 underlying companies was provided by Winterflood Securities and includes semiconductor companies (Nvidia, Taiwan Semiconductor Manufacturing, ASML, AMD, Applied Materials and Intel); search companies (Alphabet, Microsoft and Baidu); enterprise and productivity software companies (Salesforce, Workday, HubSpot, SAP and ServiceNow); and companies offering cloud computing (Amazon, IBM, Oracle and Cisco)1.
Investment companies with exposure to generative AI
|
Investment company |
AIC sector |
Exposure |
|---|---|---|
|
Allianz Technology Trust |
Technology & Technology Innovation |
37.56 |
|
Polar Capital Technology |
Technology & Technology Innovation |
36.62 |
|
Menhaden Resource Efficiency |
Environmental |
27.96 |
|
Alliance Trust |
Global |
18.69 |
|
JPMorgan American |
North America |
17.98 |
|
JPMorgan Global Growth & Income |
Global Equity Income |
17.52 |
|
Martin Currie Global Portfolio |
Global |
16.97 |
|
Scottish Mortgage Investment Trust |
Global |
13.52 |
|
Templeton Emerging Markets |
Global Emerging Markets |
12.16 |
|
abrdn New Dawn Investment Trust |
Asia Pacific |
11.44 |
|
Keystone Positive Change |
Global |
10.89 |
|
Asia Dragon Trust |
Asia Pacific |
10.10 |
|
Schroder AsiaPacific Fund |
Asia Pacific |
9.85 |
|
Schroder Oriental Income |
Asia Pacific Equity Income |
9.80 |
|
JPMorgan Multi-Asset Growth & Income |
Flexible Investment |
9.65 |
|
JPMorgan Asia Growth & Income |
Asia Pacific Equity Income |
9.51 |
|
Schroder Asian Total Return |
Asia Pacific |
9.20 |
|
Brunner Investment Trust |
Global |
8.89 |
|
JPMorgan Emerging Markets |
Global Emerging Markets |
8.42 |
|
Baillie Gifford US Growth |
North America |
8.38 |
Source: theaic.co.uk / Morningstar (as at 01/06/23). Table shows the 20 AIC member investment companies with the greatest exposure to the following 18 underlying companies identified by Winterflood Securities as having exposure to the theme of generative AI: Alphabet, Amazon, AMD, Applied Materials, ASML, Baidu, Cisco, HubSpot, IBM, Intel, Microsoft, Nvidia, Oracle, Salesforce, SAP, ServiceNow, Taiwan Semiconductor Manufacturing and Workday.
The AIC member companies with the greatest exposure to Winterfloods’ 18 companies are not surprisingly in the Technology & Technology Innovation sector, Allianz Technology Trust (38%) and Polar Capital Technology (37%). Allianz Technology has exposure to 13 of the companies, while Polar Capital Technology holds 12 of them.
Menhaden Resource Efficiency has exposure to just four of the companies, but holds large stakes in Alphabet and Microsoft, giving it total exposure of 28%. Alliance Trust has broad exposure to 13 of the names, making up 19% of its portfolio, while JPMorgan American holds five, accounting for 18% of its assets.eam.
“From renewable energy to cutting-edge biotech, investment companies are always at the forefront of investing in the latest science and technology. Their permanent capital structure means they can take a long-term view of these opportunities, rather than being exposed to the ebb and flow of investor sentiment.
“While generative AI has clearly got huge potential, investors should proceed with caution. Headlines and hype don’t always translate into huge investment returns, especially not in the short term.”
Annabel Brodie-Smith, Communications Director at the Association of Investment Companies
Annabel Brodie-Smith, Communications Director at the Association of Investment Companies, said: “From renewable energy to cutting-edge biotech, investment companies are always at the forefront of investing in the latest science and technology. Their permanent capital structure means they can take a long-term view of these opportunities, rather than being exposed to the ebb and flow of investor sentiment.
“While generative AI has clearly got huge potential, investors should proceed with caution. Headlines and hype don’t always translate into huge investment returns, especially not in the short term.”
Shavar Halberstadt, Research Analyst at Winterflood Securities, said: “From software businesses to fast-food chains, there has been a barrage of company announcements indicating that they, too, are implementing AI solutions. Given the prospects for margin and market share expansion, this is no surprise.
“We have tracked developments closely, as the impact across markets could be transformative. Given the pace of technological development, significant first-mover advantages and limited pure-play options, we believe that the investment trust structure is particularly suitable to access this theme. Active managers have the freedom to be nimble in their stock selection as appropriate in a fast-moving environment, while the ability to invest in private companies expands the opportunity set.”
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Notes to editors
- Winterflood Research notes that this list of companies is indicative and non-exhaustive.
- The Association of Investment Companies (AIC) represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s vision is for closed-ended investment companies to be considered by every investor. The AIC has 349 members and the industry has total assets of approximately £266 billion.
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