Innovation Shares Announces Launch Of Automotive NextGen Vehicle ETF

Innovation Shares Announces Launch Of Automotive NextGen Vehicle ETF

Author: Eric Walz   

NEW YORK —  Innovation Shares LLC, a sponsor of unique themed Exchange Traded Funds announced today the launch of the Innovation Shares NextGen Vehicles & Technology ETF (NYSE Arca: EKAR). The ETF is targeted at companies that are dealing with blockchain. The NextGen ETF is the first artificial intelligence (AI) driven ETF to provide investors with exposure to the universe of stocks involved in the growing categories of electric and autonomous vehicles.

Innovation Shares focuses on themes that investors are interested in but may have difficulty accessing. The company uses a AI powered natural language processing algorithm used to select stocks, which was developed at one of the world's largest quantitative hedge funds. By harnessing the potential of textual analysis, companies are identified that might otherwise be overlooked by traditional analytical research.

"The auto industry is poised to undergo a dramatic shift away from internal combustion engines to electric batteries. Meanwhile, the adoption of autonomous vehicles is being supported in numerous countries by a growing trend towards shared mobility and 'mobility-as-a-service,' as well as rapid technological advancements and an evolving regulatory environment," said Matt Markiewicz, Managing Director with Innovation Shares. "These trends are likely to upend not only the auto industry, but also the transportation of goods and people. EKAR is designed to provide a way for investors to participate in these rapidly emerging industries."

EKAR tracks an index designed to give investors exposure to a global basket of stocks that are closely involved in the growth of these markets, placing index constituents in one of four categories based on relevance.

The four categories that make up EKAR's underlying index are defined as follows:

Battery Producers: Companies that mine or produce materials, chemicals, and components that are used in the production of batteries.

OEMs: Companies that design, manufacture and/or distribute New Energy Vehicles (NEVs) and Autonomous Vehicles (AVs).

Suppliers: Companies that produce or distribute parts and components used in NEVs and AVs. This may include but not limited to thermal management (heating/cooling) systems & drivetrain elements (other than batteries).

Semiconductors & Software: Companies that produce semiconductors & software used in NEVs and AVs including but not limited to advanced driver-assistance systems (ADAS), Light Detection & Ranging (LiDAR) and infotainment. Companies that develop software necessary for sensing, mapping and providing driving policy within NEVs and ADVs.

The index underlying EKAR was constructed utilizing a patent-pending natural language processing algorithm that screens for global stocks that are believed to have a current or future economic interest in the growth of electric and autonomous vehicles.

Recent estimates have found that autonomous driving technology could represent a $7 trillion global growth opportunity by 2050, dramatically altering the way goods are shipped, and the ways in which people travel and consume goods and services.

"Through the use of textual analysis and artificial intelligence, our approach is able to identify key companies that might otherwise not be identified by traditional analytical research," continued Markiewicz. "As with KOIN, we believe that innovative themes are best captured by innovative approaches to indexing, and that's exactly what we're bringing to investors with EKAR."

KOIN, the Innovation Shares NextGen Protocol ETF, began trading on January 30th and uses the same natural language processing approach in its underlying index to identify companies driving and benefiting from the growing use of blockchain technology.

Eric Walz
Eric Walz
Originally from New Jersey, Eric is an automotive and technology reporter specializing in the high-tech industry in Silicon Valley. Eric has over fifteen years of automotive experience and a B.A. in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the automotive industry and beyond. He has worked on self-driving cars and as a technical writer, helping people to understand and work with technology. Outside of work, Eric likes to travel to new places, play guitar, and explore the outdoors.
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