Quantum computing seems like an abstruse concept. But quantum computing is here and growing and has potentially powerful capabilities, and an exchange-traded fund that launched Wednesday aims to help investors cash in on this leading-edge technology.

The Defiance Quantum ETF (QTUM) tracks the BlueStar Quantum Computing and Machine Learning Index, an equal-weight benchmark of roughly 60 companies involved with the research and development or commercialization of systems and materials used in quantum computing. That includes advanced traditional computing hardware, high-powered computing data connectivity solutions and cooling systems, and companies that specialize in the collection and management of big data used in machine learning.

In translation, that leads to a portfolio that includes Attunity, a software maker focused on big data management, as well as Cloudera, a platform developer for data management, machine learning and advanced analytics. It also includes technology heavyweights such as Qualcomm, Fujitsu, Alphabet, IBM, Applied Materials and Intel. The rest of the top 10 includes aerospace and defense giants Lockheed Martin and Raytheon.

So what exactly is quantum computing? According to QTUM’s product literature, quantum computers use principles of quantum mechanics to perform significantly more complex computations, and at exponentially faster speeds, than conventional computers. It is believed quantum computing will enhance machine learning, as well as benefit a range of industries including aerospace and defense, autonomous vehicles, cyber security, drug discovery, energy and finance.

The press release announcing the new ETF notes that Google and NASA have collaborated on a quantum computer that processes algorithms 100 million times faster than a traditional computer chip.

Quantum Leap

“Quantum” is defined by Merriam-Webster as any of the very small increments or parcels into which many forms of energy are subdivided.

According to the global consultancy Deloitte, quantum computers differ from electronic computers because they exploit the behvior of subatomic particles as described by quantum mechanics, a subfield of physics dealing with subatomic particles. Quantum mechanical mathematics require fewer steps, which makes quantum computing more efficient and much faster than traditional computers, Deloitte explained in a report it published last year.

But there are serious engineering challenges to building quantum computers, which essentially means the QTUM fund is an entre into an early-stage industry.

In its 2017 report, Deloitte said quantum computing start-ups attracted $147 million in venture capital funding during the prior three years, while governments doled out $2.2 billion to support researchers in this field. And, as indicated, various private-sector companies are looking into the potential benefits of quantum computing.

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