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Digital assets platform SoFi launches AI-themed ETF

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Uncertainty about AI investment theme growing among

investors

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Launch targets "agentic" AI theme

By Suzanne McGee

Sept 3 (Reuters) - SoFi Technologies ( SOFI ) jumped

back into the exchange-traded fund business on Wednesday with

its first launch in nearly two years, betting on artificial

intelligence, the hottest theme in retail investing.

The new fund, SoFi Agentic AI ETF, will target what SoFi

calls "next-generation AI" companies, such as those developing

self-driving vehicles, autonomous technology and cybersecurity

networks, as well as AI stalwarts such as semiconductor and

cloud computing firms.

The debut comes as enthusiasm for all things AI faces a test,

with investors asking tougher questions about sky-high

valuations of AI leaders like Nvidia ( NVDA ) and Palantir

Technologies ( PLTR ), as well as AI's ability to generate

outsize productivity and profitability gains.

SoFi's ETF will track the performance of a new tailor-made

index from BITA, the BITA USA Agentic AI Select Index, and will

levy a fee of 0.69%.

Brian Walsh, head of advice and planning at SoFi, told

Reuters that the index's current 30 components range from some

of the most-owned AI investments, such as Nvidia ( NVDA ), to more

unusual ways to play the theme, such as Intuitive Surgical ( ISRG )

and Deere & Co. ( DE ), firms which are integrating AI

into robotic surgery products and farm equipment.

Solactive screens potential holdings to identify companies

that derive "a meaningful portion of their revenue" from

deploying AI.

"This goes above and beyond what first-generation AI

exposure can provide," said Walsh, adding that he expects the

composition of the underlying index to alter as the theme

evolves.

SoFi, a digital financial services platform, has backed five

other ETFs, the most recent of which, the SoFi Enhanced Yield

ETF, debuting in November 2023.

Roxanna Islam, head of sector and industry research at VettaFi,

noted the AI-themed ETF market is becoming "crowded", as asset

managers rush to roll out more products.

Some 190 single-stock leveraged and inverse ETFs now offer

investors a way to bet on outsize moves in underlying stocks

like Nvidia ( NVDA ), Tesla and Palantir ( PLTR ) that are linked to the

AI theme.

"It's going to be hard to stand out from the crowd and

gather assets at this point," she said.

The most recent AI-themed ETF to launch was the Janus

Henderson Global Artificial Intelligence ETF on August

19. That fund has seen inflows of $1.9 million since its debut.

Steve Sosnick, market strategist at IBKR, said that in spite

of the profit-taking on big AI stocks like Nvidia ( NVDA ) in recent

days, "the enthusiasm for this theme is still driving the bus."