XAIX: Invest in the Companies Powering the AI Revolution

AI is attracting billions in investments and will soon be a multi-trillion industry. Discover how to invest in AI innovation.

Artificial intelligence (AI) is perhaps the most important technological trend of this century, with the potential to add trillions to global economic growth and transform the way companies conduct business.¹ The capabilities of AI to sense, comprehend, and act are transformative to operations across all sectors of the economy, and most experts already agree that companies that can astutely exploit this technology give themselves an edge over the competition.

AI possesses the potential to touch nearly every aspect of our lives. At a high level, the major leap forward for AI technology revolved around the advancement in Generative AI, which can “generate” new and original text, images, and audio while requiring far less data than traditional Discriminative AI models. In a sense, Generative AI has the capacity to “imagine” new “thoughts,” an ability previously believed to distinguish humans from machines.

The Transformative Potential of AI

Experts believe AI growth has the potential to dramatically increase capital efficiency, with the potential to add trillions to economic growth and to shift human labor away from mundane, repetitive tasks. The collection, analysis, and even creation of data has sweeping applications across economic and social landscapes.

Artificial intelligence will have an enormous impact in transforming industries over the coming decades. AI will play an integral role in reshaping the way that we operate day-to-day, with significant implications for corporate profitability. By aligning investments to capture the changing landscape for the AI megatrend, investors can participate in this tremendous growth and ensure they do not miss out on the transformative potential of AI, which is likely to reshape entire industries, drive innovation and shape the future of our interconnected world.

The Case for Investing in AI

Artificial Intelligence is expected to rapidly grow to a $3 trillion² industry in the next several years and has attracted hundreds of billions in corporate investment. Industry experts predict that AI could add roughly $13³-$16⁴ trillion to the global economy by 2030, creating up to 14% higher global GDP. ⁵ Goldman Sachs Research predicts that Generative AI alone could drive a 7%, or nearly $7 trillion increase in global GDP and lift productivity growth by 1.5% over a 10-year period.⁶

Importantly, Artificial Intelligence is also one of the industries identified by the U.S. Department of Defense as critical for maintaining U.S. military and economic supremacy. As a result of this designation, AI will potentially be a beneficiary of government support and funding.

Partner With a Leader in AI Investing

The Xtrackers Artificial Intelligence & Big Data ETF (XAIX) adheres to a time-tested and successful AI investment strategy. In Europe, Xtrackers created one of the original Artificial Intelligence ETFs for international investors in 2019 and today it is currently the largest ETF in the AI universe, with over $3 billion in AUM.⁷ Xtrackers has now made available this same ETF strategy to U.S. investors.

XAIX employs a distinctive approach to investing in AI. Many of the current funds in the market utilize standard mechanisms to determine if a company should be classified as an Artificial Intelligence company. This is a backward-looking model, focusing on the AI firms of yesterday. Instead, XAIX’s approach is forward-looking, as it seeks out innovative technologies by analyzing millions of approved patents on a rolling one-year basis. The result is that XAIX is selecting companies that are actively positioning themselves to be the key drivers of future AI innovation.

Relative to competitors, XAIX is a pure-play strategy, targeting AI producers and innovators, as opposed to companies merely applying the technology into their business models. This unique selection process allows XAIX to systematically identify between companies that are AI producers, as opposed to merely AI users.

^{Source: Nasdaq, Bloomberg as of 6/30/2024
Past Performance does not guarantee future results. Cannot directly invest in an index.}

XAIX follows the Nasdaq Global AI and Big Data Index NTR Index, a rules-based strategy that tracks the performance of companies engaged in the following themes: Deep Learning, Natural Language Processing (NLP), Image Recognition, Speech Recognition and Chatbots, Cloud Computing, Cybersecurity and Big Data. The index can contain up to 100 companies and is rebalanced semiannually. The companies included in the XAIX portfolio are comprised of many of the global leaders driving innovation across the AI spectrum.

XAIX is an ETF focused on discovering the companies driving future innovation across the AI spectrum. With its proven methodology and track record in global markets, American investors can now gain exposure to the companies at the forefront of the AI revolution.

^{The Nasdaq Global Artificial Intelligence and Big Data Index NTR is designed to track the performance of companies engaged in the following themes: Deep Learning, NLP, Image Recognition, Speech Recognition & Chatbots, Cloud Computing, Cybersecurity and Big Data.}

^{The MSCI ACWI World Daily TR Gross Index captures large and mid-cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries. With 2,760 constituents, the index covers approximately 85% of the global investable equity opportunity set.}

^{The S&P 500 TR Index tracks the performance of the 500 largest publicly traded companies in the United States. It is a total return index, which means that it includes both the price return and the reinvestment of dividends.}

^{The Nasdaq-100 Total Return Index includes 100 of the largest domestic and international non-financial companies listed on The Nasdaq Stock Market based on market capitalization. It is a total return index, which means that it includes both the price return and the reinvestment of dividends.}

^{1 DWS Research Institute (June 2023): “Artificial Intelligence: Opportunities for investors.”
2 Morgan Stanley (December 2023). “Megatrends: How to Invest in the AI Boom”
3 PwC (2017). “Sizing the prize: What’s the real value of AI for your business and how can you capitalize?”
4,5 McKinsey Global Institute (2018). “Notes from the AI Frontier: Modeling the Impact of AI on the World Economy”
6 Goldman Sachs Research (2023). “Generative AI could raise global GDP by 7%”
7 Source: DWS and Bloomberg, as of July 31, 2024
8 Source: Nasdaq as of June 30, 2024}

^{War, terrorism, sanctions, economic uncertainty, trade disputes, public health crises and related geopolitical events have led, and, in the future, may lead to significant disruptions in U.S. and world economies and markets, which may lead to increased market volatility and may have significant adverse effects on the fund and its investments.}

^{Investment products: No bank guarantee I Not FDIC insured I May lose value}

^{Companies involved in artificial intelligence and big data face intense competition, may have limited product lines, markets, financial resources and personnel. Artificial intelligence and big data companies are also subject to risks of new technologies and are heavily dependent on patents and intellectual property rights and the products of these companies may face obsolescence due to rapid technological developments.  Incorporation of ESG criteria in the fund’s investment strategy does not guarantee a return or protect against a loss, limits the types and number of investment opportunities available to the fund and, as a result, the fund may underperform other funds that do not have an ESG focus.  This fund is non-diversified and can take larger positions in fewer issues, increasing its potential risk. An investment in this fund should be considered only as a supplement to a complete investment program for those investors willing to accept the risks associated with the fund. Please read the prospectus for more information.}

^{Carefully consider the fund’s investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the fund’s prospectus, which may be obtained by calling 1-844-851-4255 or by downloading a prospectus at www.xtrackers.com. Read the prospectus carefully before investing.}  

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