Google ‘Willow’ Shines Light on Quantum Computing ETFs

Google unveiled its breakthrough quantum computing chip, “Willow,” on Monday as the next-generation technology exchange-traded fund, the Defiance Quantum ETF (QTUM), outperforms the broader tech sector and the S&P 500. 

QTUM has leapt nearly 40% year-to-date while the broader Technology Select Sector SPDR Fund (XLK) and the SPDR S&P 500 ETF Trust (SPY) have gained 26% and 29%, respectively. 

In its announcement Monday, Google boasted that Willow could perform a computation “in under five minutes that would take one of today’s fastest supercomputers 10 septillion years—a number that vastly exceeds the age of the Universe.” 

While investing in quantum computing is nothing new to the ETF universe, it may be considered an emerging tech space as QTUM is the only exchange-traded fund to exclusively focus on the niche technology sub-sector. 

What Is Quantum Computing? A Brief History

Quantum computing is an advanced technology leveraging the principles of quantum mechanics, such as superposition and entanglement, to perform computations far beyond the capabilities of classical computers.  

Quantum mechanics emerged in the early 20th century to address phenomena classical physics could not explain. Max Planck's 1900 discovery that energy is quantized laid its foundation, followed by Albert Einstein's explanation of the photoelectric effect in 1905. The 1920s saw major advancements, including Werner Heisenberg's matrix mechanics and Erwin Schrödinger's wave mechanics, with Niels Bohr contributing to atomic structure. These developments formalized quantum theory, which revolutionized our understanding of matter, energy, and fundamental interactions, shaping modern physics and technology. 

In 2024, its applications include optimizing complex systems in finance, accelerating drug discovery in healthcare, improving artificial intelligence algorithms, and enhancing cryptography. Quantum computing is also being explored for breakthroughs in energy grid management, material science, and climate modeling, with companies and governments investing heavily in its potential to solve problems that are currently computationally infeasible.

Quantum Computing vs Artificial Intelligence

Quantum computing and artificial intelligence (AI) are distinct yet complementary technologies. Quantum computing excels in solving specific, highly complex problems by leveraging quantum mechanics, such as simulating molecules for drug discovery or optimizing logistics. In contrast, AI mimics human intelligence through machine learning, enabling applications like natural language processing and image recognition. 

The two intersect when quantum computing accelerates AI processes, such as optimizing training for machine learning models or improving data pattern analysis. Together, they hold the potential to revolutionize fields requiring immense computational power. 

QTUM, Quantum Computing ETFs

As of Dec. 9, QTUM was the only dedicated quantum computing ETF. With $378 million in assets under management, the Defiance Quantum ETF QTUM tracks an equal-weighted index of companies involved in the research and development of quantum computers. Top holdings include D-Wave Quantum Inc (QBTS) and IonQ, Inc (IONQ). 

While not exclusive to quantum computing, some tech-oriented ETFs such as the Autonomous Technology & Robotics (ARKQ) and other thematic funds may provide exposure to companies advancing quantum technologies. These ETFs aim to capture growth potential in this emerging sector while diversifying risk