One way for a new ETF, particularly one of the thematic variety, to find quick success is to benefit from good timing or coming to market in the early stages of the theme’s relevance. The WisdomTree Quantum Computing Fund (WQTM) may just fit those bills.
Adding to a sparsely populated realm of dedicated quantum computing funds, WQTM came to market on October 9. The ETF follows the WisdomTree Classiq Quantum Computing Index. The fund could be well-timed for multiple reasons. Those include the already-budding momentum behind the quantum computing (QC) investment thesis.
Potentially adding to the case for WQTM gaining some near-term traction is market participants’ proclivity for asking “What’s next?.” That inquiry could gain steam as investors look for the next big thing in tech after AI.
There’s a Fundamental Case for WQTM
Admittedly, timing and investor sentiment are fluid situations. WQTM may or may not benefit from either. But what’s not up for debate is a compelling fundamental case underpinning WQTM and QC at large.
Consider news JPMorgan released just a few days after the WisdomTree ETF debuted. The bank said it plans to invest $1.5 trillion over a decade in various industries considered to be of importance to the U.S. economy and national security. One of those spaces is “frontier and strategic” tech, which includes AI and quantum computing.
“JPMorganChase today announced the Security and Resiliency [Initiative. It’s] a $1.5 trillion, 10-year plan to facilitate, finance and invest in industries critical to national economic security and resiliency. As part of this new initiative, JPMorganChase will make direct equity and venture capital investments of up to $10 billion to help select companies primarily in the United States enhance their growth, spur innovation, and accelerate strategic manufacturing,” said the bank in a press release.
The bank didn’t specify which quantum companies it might invest in. WQTM’s roster is home to some of the industry’s leaders and some of the technology sector’s biggest names. So it’s possible some of the ETF’s component will draw investments from the bank over time.
Possibly adding to the case for WQTM is that some of the emerging leaders in the quantum computing industry are experiencing top line growth. They are just beginning to scratch the surface of what could be exponential revenue growth.
Important Market Milestone
“In the United States, QC companies alone are set to generate more than $1 billion in revenue this year, an important milestone for the [market. And] the sector is expected to grow even further until 2040, reaching between $45 billion and $131 billion according to different market scenarios,” according to McKinsey.
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