Look outside the Magnificent 7 to play the AI boom

Madison Mills, AXIOS

The AI Boom Is Real — But the Best Plays Aren’t Just the Mag 7

Meta and Microsoft posted strong earnings, but the Mag 7 as a group are lagging the S&P 500 this year.

Want real AI exposure? You should consider looking beyond the mega- caps.

The AI Supercycle ETF (AIS) focused on companies powering AI infrastructure, is outperforming both the Mag 7 and the broader market.

💡 The takeaway: If you’re only holding the Mag 7, we believe you’re missing the AI Supercycle.

“Years ago, I gained an insight from the early AI data center buildouts at Tesla. The AI chips were only about 5% of the total cost with the remaining 95% going into everything else (power electronics, cooling, fiber, substrate, networking software, etc.). Almost that same ratio still applies today. Nvidia may dominate the conversation, but it represents just a small fraction of the cost to actually build and run these systems. The other 95% is spread across dozens of lesser-known companies building the real backbone of AI.”

— Jon McNeill, Co-Founder of VistaShares and DVx Ventures, former President of Tesla

AIS Performance & Holdings: https://vista.leibowitzdesign.com/etf/ais/#performance

AIS Disclosures: https://vista.leibowitzdesign.com/etf/ais/#documents

Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call (844) 875-2288 or visit www.VistaShares.com. Read the prospectus or summary prospectus carefully before investing.

Investments involve risk, including the loss of principal.

Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance current to the most recent month-end can be obtained by calling (844) 875-2288.

Foreside Fund Services, LLC, distributor.

Important Information:

VistaShares Artificial Intelligence Supercycle ETF (AIS)

For the VistaShares Artificial Intelligence Supercycle ETF (AIS) top holdings & fund details, please visit: https://vista.leibowitzdesign.com/etf/ais/#holding

For AIS standardized performance, please visit https://vista.leibowitzdesign.com/etf/ais/

Mag 7 / Magnificent 7: refer to a group of seven large-cap technology companies that have significantly driven market growth, particularly in recent years. These companies are: Apple (AAPL), Microsoft (MSFT), Alphabet (Google) (GOOGL), Amazon (AMZN), Meta Platforms (Facebook) (META), Nvidia (NVDA), and Tesla (TSLA).

The S&P 500: Tracks the market capitalization of the roughly 500 companies included in the index, measuring the value of the stock of those companies

Pure Exposure: The Index is a rules-based composite index that tracks the market performance of companies, listed on global stock exchanges, that derive their revenues from producing high-performance AI semiconductors, and building and operating AI-enabled applications and datacenters.

High Beta: Refers to a security or portfolio that is more volatile than the overall market.

Under normal circumstances, the Fund will invest at least 80% of the Fund’s net assets (plus borrowings for investment purposes) in AI companies. The Fund may invest up to 20% of its net assets in companies that are not included in the 80% test noted above. These investments can include equity securities and depositary receipts of issuers that are not Index constituents but that the Sub-Adviser would characterize as emerging AI companies, based on the Sub-Adviser’s analysis of publicly available business plans and as may be further evidenced by capital expenditures, research and development efforts and business acquisitions. This 20% of the Fund’s portfolio may also be invested in cash or cash equivalents (including money market funds).

Artificial Intelligence Risk: Issuers engaged in artificial intelligence typically have high research and capital expenditures and, as a result, their profitability can vary widely, if they are profitable at all. The space in which they are engaged is highly competitive and issuers’ products and services may become obsolete very quickly. These companies are heavily dependent on intellectual property rights and may be adversely affected by loss or impairment of those rights. The issuers are also subject to legal, regulatory and political changes that may have a large impact on their profitability. A failure in an issuer’s product or even questions about the safety of the product could be devastating to the issuer, especially if it is the marquee product of the issuer. It can be difficult to accurately capture what qualifies as an artificial intelligence company.

Equity Market Risk: Common stocks are generally exposed to greater risk than other types of securities, such as preferred stock and debt obligations, because common stockholders generally have inferior rights to receive payment from specific issuers.

Technology Sector Risks: The Fund will invest substantially in companies in the technology sector, and therefore the performance of the Fund could be negatively impacted by events affecting this sector. Market or economic factors impacting technology companies and companies that rely heavily on technological advances could have a significant effect on the value of the Fund’s investments.

Foreign Securities Risk: Investments in securities or other instruments of non-U.S. issuers involve certain risks not involved in domestic investments and may experience more rapid and extreme changes in value than investments in securities of U.S. companies. Financial markets in foreign countries often are not as developed, efficient, or liquid as financial markets in the United States, and therefore, the prices of non-U.S. securities and instruments can be more volatile

Index Strategy Risk: The Fund’s strategy is linked to an Index maintained by the Index Provider that exercises complete control over the Index. The Index Provider may delay or add a rebalance date, which may adversely impact the performance of the Fund and its correlation to the Index. In addition, there is no guarantee that the methodology used by the Index Provider to identify constituents for the Index will achieve its intended result or positive performance. Errors in Index data, Index computations or the construction of the Index in accordance with its methodology may occur from time to time and may not be identified and/or corrected for a period of time or at all, which may have an adverse impact on the Fund.

New Fund Risk: The Fund is a recently organized management investment company with no operating history. As a result, prospective investors do not have an extensive track record or history on which to base their investment decisions.

New Sub-Adviser Risk: The Sub-Adviser is a newly formed entity and has no experience with managing an exchange-traded fund, which may limit the Sub-Adviser’s effectiveness.

The Sub-Adviser defines an “AI company” as a company that, based upon publicly available revenue data derives at least 50% of their revenues from or have at least 50% of their assets invested in or have the potential to generate 50% of their revenues from or have at least 50% of their assets devoted to the production, development and/or operation of (i) high-performance semiconductors used for AI (artificial intelligence) related hardware & software, (ii) AI related datacenters, and/or (iii) AI enabled applications.

The Sub-Adviser defines “supercycles” as long-term trends that disrupt current economic models through disruptive technological advancements shaping our world. The Fund’s portfolio is expected to consist of all or a representative sample of the securities in the BITA VistaShares Artificial Intelligence Supercycle Index (the “Index”).

The BITA VistaShares Artificial Intelligence Supercycle Index is a rules-based composite index that tracks the market performance of companies, listed on global stock exchanges, that derive their revenues from producing high-performance semiconductors, and building and operating AI-enabled applications and datacenters.

Active Share. Active Share is a measure of how much a portfolio’s holdings differ from its benchmark index.

Basis Point. A basis point is a unit of measure used in finance to describe percentage changes or differences in interest rates, bond yields, or other percentages.

Alpha: Measures the excess return or “outperformance” of an investment. Measures the excess return or “outperformance” of an investment.