BlackRock’s Two Newest Active ETFs Target AI and Tech

BlackRock introduced two actively managed ETFs targeting artificial intelligence and technology opportunities, according to a Tuesday company release.

The iShares A.I. Innovation and Tech Active ETF (BAI) and iShares Technology Opportunities Active ETF (TEK) will be managed by Tony Kim and Reid Menge of BlackRock’s Fundamental Equities Technology Group, the press release said.

The AI Investment Approach

BAI will maintain a concentrated portfolio of around 20 to 40 global AI and technology stocks across market capitalizations, according to the press release. The fund’s prospectus indicates it will invest at least 80% of assets in companies involved in AI innovation, technology, and tech-related sectors.

The fund targets companies across multiple layers of the AI stack, including AI infrastructure (AI power, accelerated computing, cloud infrastructure), intelligence (AI models, data), and applications (data software and tools, AI applications, services and solutions), according to the prospectus.

TEK, meanwhile, seeks long-term capital appreciation through a broader technology focus, holding around 50-70 global technology companies across sectors including semiconductors, software, hardware, internet, services, content and infrastructure, according to its prospectus. The ETF follows a similar strategy to BlackRock’s Technology Opportunities Fund (BGSIX).

Both funds can invest in companies of any market capitalization located worldwide, including emerging markets and initial public offerings, their perspectives stated. The funds may also invest in convertible securities, preferred stocks, and real estate investment trusts.

BAI will charge 0.55% in expenses after a fee waiver, while TEK will charge 0.75%, according to their respective prospectuses.

The funds will concentrate investments in technology-related industries and are classified as non-diversified, meaning they can invest a greater percentage of assets in fewer issuers compared to diversified funds, the prospectus noted.

iShares currently offers more than 1,400 ETFs globally with $4.2 trillion in assets under management as of Sept. 30, according to the announcement.