With artificial intelligence expanding at a rapid pace, so are related regulatory concerns. Regulators around the world are grappling with how to oversee AI without stifling innovation. ESG issues are seen as top of mind.
Funds like the Invesco ESG Nasdaq 100 ETF (QQMG ) could be viable ways for investors to tap into the burgeoning AI theme with an eye toward the potential impacts of new regulations. Tracking the ESG counterpart to the Nasdaq-100 Index (NDX), QQMG checks two important boxes. It’s an ESG ETF, and it’s home to a slew of AI stocks.
Those credentials, coupled with QQMG’s YTD gain of 21.41% potentially highlight the ETF’s utility against the backdrop of an evolving AI regulatory regime — one that’s global in nature.
Why QQMG Matters Now
In theory, increased regulations and oversight don’t necessarily imply ESG relevance. However, in the case of AI, there are an array of ESG issues global regulators are attempting to address. That could cement the relevance of QQMG as an artificial intelligence play.
“In general, it’s very clear that policymakers and regulators increasingly expect AI systems developers to adopt what we’d call the socio-technical approach, focused on the interaction between people and technology,” noted Mike Canfield, Morgan Stanley’s Europe, Middle East and Africa head of sustainability research.
Canfield highlights four pivotal concepts that could act as foundations for AI regulations: ethics, privacy, security, and transparency. In their own rights, those concepts have ties to governance and/or social issues. Arguably, that’s confirmation of QQMG’s relevance in the AI investing conversation.
The “E” in ESG will likely be prominent due to the substantial energy needs of AI enablers and adopters. Many are responding by embracing nuclear energy. That could be helpful regarding staying in the good graces of regulators. Should AI companies, including QQMG member firms, accomplish that, they can focus on what really matters: innovation and outcomes.
“Some of these exciting opportunities include things like improving education outcomes, smart electric grid management, enhanced medical diagnostics, precision agriculture, and biodiversity monitoring and protection efforts. AI clearly has enormous potential to accelerate drug development, to advance material science research, to boost manufacturing efficiency, improve weather forecasting, and even deliver better natural disaster predictions,” added Morgan Stanley’s Canfield.
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