A technology fund manager said that artificial intelligence will become an investment theme that will continue to grow in 2025 and beyond. Stock picking is based on proprietary research that combines factors with company fundamentals. “In this ETF, we used a combination of top-down and bottom-up research to build this portfolio,” Lee told CNBC Pro in Hong Kong. “The top-down approach helps us identify (linked) It will cover topics such as the impact of interest rate decisions) and identify industries such as artificial intelligence or cryptocurrency,” Li added. “The bottom-up approach helps us identify stocks with solid fundamentals.” 3056-HK 1Y Line Lee said that the fund’s strategy is to focus on long-term returns rather than short-term trends, especially in the field of artificial intelligence. The fund has held shares in Nvidia since its inception in December 2022. “Artificial intelligence is a long-term trend. It’s not just a one or two-year thing,” Li explained. He mentioned comments by Nvidia CEO Jensen Huang, who said that artificial intelligence has been developed for many years and can understand vision and text and will enter the physical field. The ETF manages a highly concentrated portfolio of 17 stocks, including Microsoft, chipmaker TSMC, Spotify, Apple, Amazon, Netflix, Nvidia and Tesla, among others, making the fund the best-performing active in the world. One of the managed ETFs. Last year, these 17 stocks had an unweighted average return of 75%. The fund manages $10 million in assets and invests primarily in U.S. listed companies. The fund’s management company, Pando Finance, was established in Hong Kong in 2021 and is relatively new to the industry but manages more than $500 million in assets. However, its top brass have years of industry experience, including its CEO and founder Ren Junfei, who was a senior executive at German stock exchange Deutsche Börse and Zhen Fund, one of China’s largest venture capital funds. The company also manages ETFs focused on companies operating in blockchain technology. CIO Lee said it leveraged its expertise in the cryptocurrency space to identify MicroStrategy and Coinbase as holdings for the CMS Innovative fund. MicroStrategy, whose shares are up 358% in 2024, is widely seen as the face of Bitcoin due to its leveraged holdings of the cryptocurrency. It is a top-10 holding in the Pando CMS Innovation ETF and contributes significantly to the fund’s overall performance. Likewise, Nvidia and Spotify have triple-digit returns in 2024 and are among the fund’s top 10 stocks. Lee said he expects Nvidia to continue to outperform as it brings structural changes to the global economy through the widespread use of artificial intelligence. However, he warned that the company would have difficulty maintaining its current gross profit margin of about 75% in the future as competitors seize market share. “I think Nvidia’s high profit margin will be difficult to maintain at 75%. I think it will (drop) to as high as 60(%). Maybe not next quarter, but maybe next year,” Li said. “But I think margins are going to start to decline.” Microsoft, one of Nvidia’s largest customers, has begun to diversify the AI processors it uses. Analysts say the company has ordered much cheaper AI chips from California-based chip designer Broadcom. Microsoft is the Pando ETF’s largest holding, accounting for 9.4% of the fund, while Broadcom accounts for 2.9% of the fund. The fund has held AI chip stocks as well as chip maker TSMC since its inception. AMD and Adobe were drags on the fund’s performance, falling 18% and 26% respectively. By the end of 2024, both stocks account for less than 2% of the fund.
Fund manager reveals how his little-known ETF could rise 80% in 2024 | Real Time Headlines
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