As more and more exchange-traded fund providers pile into the “disruptive” technologies space that includes such themes as artificial intelligence and autonomous vehicles, it’s getting harder for these types of products stand out from the crowd.
A proposed ETF that’s expected to join the fray this week may or may not rise above the din, but it does come with an interesting back story.
Innovator Capital Management LLC on Monday announced it has licensed the Loup Frontier Tech Index from Loup Ventures LLC, in anticipation of Wednesday’s launch of the Innovator Loup Frontier Tech ETF (LOUP).
Innovator, a fund sponsor created in 2017, is led Bruce Bond and John Southard. The duo founded PowerShares Capital Management in 2002 and eventually helped make it the nation’s fourth-largest ETF provider. They sold the company 12 years ago, and the former PowerShares funds were recently rebranded under the name of their current owner, Invesco.
Innovator has a licensing agreement with financial research and media company Investor’s Business Daily for two existing products—the Innovator IBD 50 ETF (FFTY) and the IBD ETF Leaders ETF (LDRS). (The company has four ETFs total.)
Its licensing arrangement with Loup Ventures means that Innovator’s newest ETF will focus squarely on leading-edge frontier technologies. Loup is a venture capital firm started early last year by a trio of former sell-side equity analysts at Piper Jaffray.
The group’s most recognizable member is Gene Munster, who’s a familiar face on CNBC and has been considered the “ax” when it comes to Apple. (“Ax” is a sell-side analyst regarded as the most influential regarding a particular company.) Munster and his team—which also includes Doug Clinton and Andrew Murphy—covered the internet space but now are more focused on frontier technology themes they believe are most likely to disrupt consumer and enterprise businesses over the next several decades.
The rules-based Loup Frontier Tech Index is centered on familiar themes such as AI, robotics, autonomous vehicles and virtual or augmented reality. It also incorporates the field of computer perception, which involves companies that provide hardware and software related to enabling vision, which could include sensors, laser arrays, semiconductors and other technologies.
Loup Venture’s basic premise is that major technology shifts occur every 10 to 15 years, and that the above-mentioned themes—as well as others—are combining to build on prior tectonic shifts involving computers, the internet and smart phones.
The Loup index comprises 31 companies ranging from the familiar—such as Advanced Micro Devices, Nvidia Corp. and Tesla Inc.—to smaller, more obscure names.