Global X Boosts European BOTZ Single Stock Cap

As much as 35% of the AI & robotics ETF, whose top holding is Nvidia, can be made up of a single company's stock.

Reviewed by: Staff
Edited by: Ron Day

Global X, whose 90 U.S.-issued exchange-traded funds hold $43.2 billion, is boosting the portion its European robotics and AI ETF can invest in a single stock to make space for the skyrocketing price of Nvidia Corp., the fund’s top holding.

In a London Stock Exchange filing, the firm said the $52 million Global X Robotics & Artificial Intelligence ETF UCITS (BOTZ) will see the limit for a single holding increase to 35% from 20% under “exceptional market conditions which may include the dominance of a particular issuer in the relevant market."

The change does not affect Global X's similar, U.S.-issued fund, the $2.6 billion Global X Robotics & Artificial Intelligence ETF (BOTZ).

"With the performance of Nvidia relative to peers, the stock was close to 20% and thus, Global X applied to the Central Bank of Ireland (CBI) to add the ability to raise this limit to 35% in exceptional market conditions which may include the dominance of a particular issuer in the relevant market," Rob Oliver, head of business development at Global X, said.

BOTZ, which tracks the Indxx Global Robotics & Artificial Intelligence Thematic index, offers exposure to 42 companies. The top four holdings currently account for 47.2% of the index. The top holding, Nvidia, has a 21.2% weighting for BOTZ, followed by Intuitive Surgical (10.7%), ABB (8.6%) and Keyence (6.7%), as at 26 February.

NVDA Weighting in BOTZ

Nvidia has seen its shares quadruple in value since the launch of ChatGPT in November 2022, aiding the performance of ETFs with Nvidia weightings.

The $2 trillion chipmaker's shares jumped 16% Feb. 22, the day after it reported stronger-than-expected fourth-quarter sales and profit.

The European BOTZ has returned 103.9% since inception in 2016, with its most dramatic rise occurring in 2023 after Nvidia hit a $1 trillion market cap in May after posting $7.2 billion of sales.

Other news from the ETF issuer came last week when it appointed Ryan O'Connor as CEO from Goldman Sachs Asset Management, replacing Luis Berruga who departed last November.

Note: Updates headline and top of story in clarify that changes affect the European BOTZ and do not have an impact on the U.S.-issued ETF with the same name.