Artificial intelligence (AI) has been one of the hot trends this year. But it won’t be a one-trick pony exclusively for 2023. To get balanced exposure to AI and other disruptive technologies, consider the ALPS Disruptive Technologies ETF (DTEC ).
AI and other technological advances poised for disruption will be an enduring theme that can offer investors long-term growth. Disruption has permeated certain industries more than others. Yet it won’t be relegated to a certain sector, especially over time as adoption grows.
“It is a phrase to describe technological innovations that create entirely new markets and industries or fundamentally alter existing ones, displacing earlier technologies,” wrote Craig Huffman in RE Journals. "Truly disruptive tech typically offers a solution for more affordable or simplified processes across a wide range of applications or provides alternative products/services that make things more accessible to the larger population.
From cloud computing to machine learning, the investment options are vast when it comes to disruptive technology exposure. Healthcare and biotech are early adopters of technologies like AI, but as mentioned, time will reveal additional expansion into other sectors.
“Nearly every modern industry is undergoing a massive disruption to its traditional processes in the wake of AI expansion, and many organizations are beginning to adopt powerful tools and applications powered by AI software to enhance operations and create space for greater innovation,” Huffman added. “In particular, the healthcare and biotech industries have arguably experienced one of the most significant upheavals to their status quo, as recent events and medical breakthroughs have created a significant need for AI applications that enable and enhance new and existing processes and services.”
One-Stop Disruption Exposure With DTEC
Rather than creating a deeply diversified portfolio of stocks that encapsulate disruptive technology, DTEC can serve as a one-stop exposure option. The fund offers a balance of exposure to various technologies, offering somewhat of an equal-weight strategy that includes fintech, data and analytics, cybersecurity, and more.
Overall, DTEC seeks investment results that correspond generally to the performance of its underlying index, which is the Indxx Disruptive Technologies Index (IDTEC). As such, the ETF delivers exposure to companies using disruptive technologies. Those include ones that are entering traditional markets with new digital forms of production and distribution, seek to disrupt an existing market and value network, displace established market-leading firms, products and alliances and increasingly gain market share.
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