Even in the midst of a complicated market environment for growing technology stocks, the future is still happening. Investors who want exposure to cutting-edge technologies can look to a machine learning ETF the Franklin Intelligent Machines ETF (IQM), which has notable exposure to key companies in the semiconductor supply chain.
It’s no secret that semiconductors have had an up and down year, including the US placement important new restrictions on the sale of advanced chip technology to China and the many semiconductor companies based there. But there are signs that the worst for the sector may be over following Warren Buffet’s Taiwan buy semiconductor stocks.
A recent company that investors want to keep an eye on is ASML (ASML), the Dutch semiconductor company. The firm has plans to open a 16,000-square-foot facility outside of Seoul in 2024, it announced last week, strengthening its relationship with South Korea’s key semiconductor-dependent companies.
ASML’s backorders and overall pipeline could also bolster its dominance in semiconductor construction, enabling it to cope with interest rates and recession turbulence next year.
IQM has one of the largest weightings to ASML among ETFs, with an exposure of 4.8% to ASML. The machine learning ETF is actively managed and invests in companies that benefit from advances in machine learning, such as robotics, data analytics and self-driving vehicles.
IQM charges a 50 basis point fee and has significantly outperformed both the ETF Database Category Average and the Factset Segment Average by at least 6%, returning 13.3% over a month compared to 2% and 7.2 respectively % for his averages according to VettaFi.
IQM also has some notable tech names like Apple Inc. (AAPL), Tesla Inc. (TSLA) and Intuitive Surgical, Inc. (ISRG).
Investors still looking for the right technology allocations have many options to choose from, but IQM may be worth pursuing – the strategy will benefit from a semiconductor resurgence and with strong active management from Franklin Templeton, the machine learning ETF might keep an eye out over the next few weeks.
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