The Franklin Intelligent Machines ETF (IQM) is an actively managed fund that seeks to profit from companies that will profit from advances in machine learning, such as robotics, driverless vehicles, and data analysis. It is one of three actively managed thematic funds launched by Franklin Templeton in February 2020.
IQM’s management fee is high compared to ultra-low-cost plain-vanilla index funds, but it isn’t outrageous for active products. Still, for the cost-conscious, there’s significantly cheaper technology index ETFs out there, like the Vanguard Information Technology ETF (VGT). For investors who want innovation and don’t mind paying a bit extra for active management, there’s competitors like the ARK Innovation ETF (ARKK), run by the stock-picking team at ARK Invest. There are also specialized index funds that cover some of the same themes, such as the Global X Cloud Computing ETF (CLOU).
Ultimately any actively managed fund is a bet on the manager’s ability to outperform the market. IQM offers a narrow portfolio and investors and advisers will want to consider whether or not IQM is suitable for their objectives. It is reasonably priced for what it offers, though IQM is not a tool for buy-and-hold investors who want low-cost asset allocation.