General Description

Widespread AI adoption across industries has enhanced the demand for AI hardware. Nvidias dominance persists given its vertically integrated platform and powerful chip–software stack. However, other players are also gaining momentum: ASML holds a near monopoly in EUV lithography, while TSMC leads in high-volume manufacturing of advanced AI chips. The AI Hardware share basket is constructed using a market-cap-weighted approach, incorporating caps and floors to balance exposure. Each stocks initial weight is based on its share of the baskets total market capitalization. To prevent disproportionate concentration, companies with a market cap weight exceeding 30% are capped at a maximum of 30%, while those with a weight below 8% are adjusted upward to 8%. Then, the residual weight available for allocation after applying the caps and floors is redistributed proportionally among the remaining companies, based on their respective share of the total market capitalization within this group alone. The basket has outperformed the index over a 5-year analysis, giving an annualized return of 50.1% vs S&P 500 returns of 13.5%.