Beyond The Buzz? This ETF Fund Reports It Looks To Focus On Capturing Value Through Good Old Fashioned Fundamentals, And Artificial Intelligence Is On Its Radar

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Slap the words non-fungible token (NFT), metaverse, and gaming onto a press release nowadays, and you’ll likely attract a swarm of trigger-friendly investors. 

Due diligence, fundamentals, and historical performance sometimes end up having little bearing on the business buzzwords – they’re immutable and final. The dot.com bubble in the late 1990s, for example, attracted an invasive euphoria, which eventually culminated in a 75% fall in the Nasdaq Composite Index between March 2000 and October 2002. 

Historical moments like these are why some exchange-traded fund (ETF) managers like TrueMark Investments reportedly hold strong to their fundamental investing philosophy. This is not to say that there should be no excitement around emerging technologies. Advocates of the dot.com movement were right after all – the internet did change everyone’s lives – but only a few companies in the dot.com era became the corporate giants that investors dreamed of. 

TrueMark states that it looks to draw from the lessons of history, and is now actively eyeing the technology companies of the future but maintains certain precautions. The firm thinks artificial intelligence – and its machine learning and deep learning derivatives – have the potential to disrupt the world. 

TrueMark has created the TrueShares Technology AI and Deep Learning Fund LRNZ. The LRNZ is an actively managed ETF that seeks to provide targeted exposure to companies that are significantly involved in the application of high levels of AI.

The LRNZ ETF

“To our knowledge, LRNZ is the only AI fund that is solely focused on the more advanced applications of artificial intelligence utilized in areas such as cloud computing, cyber security, and medical research, without adding exposure to legacy robotics or software applications. Artificial intelligence offers the potential to revolutionize the way technology and businesses operate, and LRNZ is intent on investing in companies that we believe will lead this generational innovation,” says TrueMark.

This concentrated portfolio will generally hold the publicly listed equities of 20 to 30 companies in the technology sector. As of Dec. 31, 2021, the LRNZ ETF has 22 holdings. It has 19 sophisticated AI users, three semiconductor companies, and one software/algorithm provider. The ETF’s top five holdings include Zscaler Inc. ZS, Datadog DDOG, NVIDIA Corp. NVDA, CrowdStrike Holdings Inc. CRWD, and Xilnx Inc. XLNX. 

TrueMark reports that two seasoned portfolio managers are responsible for the active management of the LRNZ ETF. Sam Kim, for example, has been in the industry for 25 years, specializing in investment, research, and analysis of secular growth companies. Prior to founding Black Hill Capital Partners, Mr. Kim was a senior analyst at Amerindo Investment Advisors and a software systems engineer at Raytheon Technologies Corp. RTX. Jordan Waldrep, who has been in the investment industry for over 16 years, joins Mr. Kim as the other portfolio manager responsible for the LRNZ ETF. Prior to joining, Mr. Waldrep was the portfolio manager for a pair of long equity portfolios at BlackFin Capital and principal at Hourglass Capital.

For more on the fund, click here. 

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