First Look ETF: Agentic AI and Tax-Efficient ETFs

Hello everyone.

Thanks for joining us.

You are watching the October episode of First Look ETF.

I'm Stephanie Stanton with ETF Guide.

We are so glad to have you with us.

Coming up on today's show, we'll examine a new ETF from Lion Shares that aims to diffuse the tax bill associated with dividends.

And two investment firms diving into artificial intelligence, Sofi and Wedbush Fund Advisors, each launching ETFs focused on the fast growing AI sector.

We will share their unique strategies.

But first, we are kicking off this episode at the New York Stock Exchange.

As always, let's welcome Bal Little with a look at the latest ETF launches and more.

Bal, thank you so much for joining us. >> Thanks for having me.

I'm really excited to be here. >> All right, let's begin with the latest update on ETF launch activity.

What are things looking like? >> Yeah, it's been a very busy third quarter and the momentum continues, right?

So year to date through the end of September, the ETF industry has launched 776 new ETFs, already surpassing 2024's fullear total of 747.

The US market is now home to nearly 4,600 ETFs.

The industry continues at its record-breaking pace.

And look, year to date, net inflows have surpassed now $900 billion through the end of September, putting the market on pace for the second consecutive year of over $1 trillion of inflows.

Equity ETFs remain dominant. led by strong flows into US large cap and tech focused strategies.

While fixed income ETFs have saw actually saw a significant demand and growing expectation given the fact that the Fed would cut rates with active bond ETFs now capturing 44% of flows in the third quarter.

It's no surprise what's going on over there.

Notably, I do want to mention that international equities and commodity ETFs also gain traction due to a weaker dollar and diversification demands.

In our opinion, the remainder of 2025 will continue to be a busy year, both on the active side for launches and for flows. >> And Bal, we've seen robust ETF trading volume and asset growth.

What factors are contributing to the acceleration and what else do you see on the horizon? >> The message is clear.

ETF investors are embracing active strategies with strong flows across the investment spectrum.

Nearly 80% of all launches year to date have been active.

This trend is uh reflecting good demand and a market that's recalibrating for macro uncertainty.

This momentum underscores ETFs as not only an expanding role in the portfolio but as the preferred vehicle for precision liquidity and diversification.

When it comes to tailwinds, there are two major announcements. the first the SEC approved generic listing standards for ETFs, streamlining the path for crypto and spot commodity uh and commodity based products.

Additionally, the SEC green lit multi-share class structure, allowing mutual fund managers to add ETF share classes, ushering in a new era of flexibility and innovation across traditional and digital assets portfolios. >> Well, we have a great guest lineup.

What are you looking forward to on today's show?

Look, we got a great lineup today and I'm excited for what's ahead.

First up, we have SoFi, which brings a fresh perspective with its newly launched AI focused ETF.

Another step into into democratizing finance.

And next up, we had Webb Bush.

Web Bush enters into the space with a new arm of their business with Wed Bush Fund Advisors offering actively managed and rules-based strategies built for today's investor.

And finally, we have Lion Shares, who's debuting a taxefficient ETF designed to avoid dividend distribution, an innovative a truly innovative approach to compounding returns.

And look, I'm excited to dive in not only to their unique approaches, but to hear how they're navigating today's landscape uh as it continues to change. >> Thank you, Bol for the update.

Keep up the great work and we will see you soon. >> Thank you, Stephanie, for having us.

And continuing with our AI theme, investing in artificial intelligence can be a huge opportunity, but it can also be highly complex with potential pitfalls.

AI technology, as we've heard, is rapidly evolving, and it can be a challenge for investors to separate the hype from reality.

Well, a new ETF from SoFi aims to help investors tap into a segment of AI technology that might be unfamiliar.

And here to explain more is Brian Walsh, head of advice and planning with SoFi.

Brian, thank you so much for being with us. >> Thank you so much for having me today. >> Okay, so before we discuss your newly launched ETF, we first want to talk about Agentic AI.

We want to help understand this.

How is Agentic AI different from other types of AI and what type of investment opportunity does it offer? >> Yeah, I I love this question because I'm not going to lie. the first time you know we're tossing around the idea of launching this new ETF.

I really had to dive into this further myself.

Um really agentic AI uh would be systems that make autonomous decisions to complete complex tasks with very little human interventions.

So think things like self-driving cars or self-driving transportation, scheduling assistance, cyber security networks, autonomous industrial machinery, those types of things.

And we're seeing this really as the next evolution of artificial intelligence where we really started years ago with machine learning.

Then we had generative AI and then now we have aic AI where more and more companies are starting to incorporate it in their business process to either increase revenue, reduce expenses or enhance the experience.

And one of the things that we get questions on is like how is this different than generative AI? because I think that's something that people use in the palm of their hand, at least I do, um, on a regular basis.

Um, really generative AI relies on human instruction to create content and it can't independently handle complex tasks and that's much different than Agentic AI and that's where we see this as offering potential to really transform industries over the coming years. >> So the SoFi Agentic AI ETF and your ticker is AGIQ. um this is among your latest ETF launches.

Tell us more about the fund's holdings and strategy.

Also, what can we expect to see inside this portfolio? >> Yeah, so AGIQ was launched uh about a month ago and really the focus of this fund is to invest in companies that either develop, provide or use Agentic AI.

So it could be companies that provide the foundational technology or the hardware um to ultimately operate Aentic AI or it could be companies across different sectors that are utilizing Agentic AI to streamline their operations, reduce their expenses, enhance their revenue.

Um we created a custom index called the Beta US Agentic AI index which is made up of currently 30 different holdings um that provide exposure to companies that both provide and leverage Agentic AI.

So, I think you'll see, you know, I would guess the uh the most expected holdings things like Nvidia and Tesla and those kind type of companies inside, you know, the ETF, but you're also going to see companies um like Palanter, Crowdstrike, Qualcomm, um Palo Alto, uh Thermoffisher Scientific.

So we're really trying to broaden this just from a pure underlying tech or hardware play to really expose allowing people to get exposure to the overall ecosystem and that evolution in artificial intelligence. >> Yeah, that makes sense.

And and maybe taking a deeper dive too some of those names uh that we may not be as familiar with as you mentioned that you know the Teslas and the Nvidas. um how do you see advisers and investors potentially using AGIQ inside of a diversified portfolio? >> Yeah, and I think the the question there and stressing the diversified portfolio, that's that's key here because um really we see this being a component of a portfolio where if we know we want to gain exposure, whether it be personal investors who are like, hey, we have a thesis here.

Um, we view this as a way to get more diversification than investing in a single stock or an easy button for advisers to provide exposure to this thematic tilt um, without just picking individual stocks and then it's going to be managed on an ongoing basis. >> Yeah, makes sense.

I mean, it sounds it sounds like uh, you know, an easy you guys make it easy for investors.

They don't have to do all their own research and dig deep.

You've got, you know, you you're doing the work for them.

So >> exact and I think we that's where really this came from was we saw our investors were picking and choosing these individual companies and had concentration risk in one single company and we knew it was of interest so that we wanted to provide that diversified exposure to help them really do it responsibly. >> Yeah, makes a lot of sense.

Brian, thank you so much for joining us.

We appreciate your time today.

Good luck. >> Thanks for having me. >> The future isn't a distant dream.

It is already here and artificial intelligence is leading the next revolution.

But how do you invest in it and how do you find the real gamechanging companies?

Well, a new ETF built on the proprietary research of renowned tech analyst Dan Ies from Wedbush Fund Advisors was re recently launched on the New York Stock Exchange.

And here to tell us more is Colin Rogers, chief investment officer with Wedbush Wealth Adviserss.

Colin, it is so great to see you. >> Thanks, Stephanie.

Great to be here. >> So, investing in AI, it is a huge opportunity right now, but it's also very complex.

AI technology is of course rapidly evolving and it can be a challenge for investors to sort of separate the hype from reality.

So, how can your firm's expertise help advisers and investors? >> Well, I think that's really exactly why we launched the product.

Um, when you think about Dan Ies, who's he's got two decades of incredible calls and I think better than anybody in the world is able to take this giant mosaic that is the tech sector and distill it down into really clear, clean themes, this one being targeted at AI.

Um, but I think that's the distinct advantage of what we tried to create here is turning this research that we know is so fantastic in everything that Dan I has done in his in his career and turn it into an investment vehicle.

Um, and all that starts with the Dan Ives AI30, which is this curated list of 30 names that that he thinks are the best and brightest across the entire ecosystem of AI.

Um, which we then wrap a passive index around.

And so instead of trying to chase the headlines and try to pick and choose the winners, we're creating this dynamic flowing entity that feeds off of Dan's research to give you a curated list that you can invest in directly. >> Yeah, absolutely.

And of course, the ETF is uh appropriately named Ives, the ticker IVES.

Um this is your first ETF launch, by the way.

So, congratulations on that.

Tell us a little bit more about the fund strategy and what types of companies it targets. >> Yeah, so thank you.

It's been an incredible launch.

Um we're four months in and over 800 million in AUM, so it's been about as good as we could possibly imagine.

And a lot of that's credit to Dan's brand and what he's done his entire career.

But going back to what I just said, it it really is built around this AI30.

And I think when you think about how fast AI is moving, you know, what's there at the tip of the spear right now in two to three years could be completely obsolete.

And so looking at the other passive plays in the ETF sector, you've got a lot of third party classification scheme indices, AI mentions and earnings reports, nothing that I think moves at the pace that AI does.

And so the differentiating factor here is that Dan is selecting this list with the entire webbush tech team to create a forward-looking view into what are going to be the 30 companies that shape the entire ecosystem.

And if quantum computing takes over in a few years and and traditional compute goes away, it enters into the AI30 and then we wrap that into our ETF.

So it's really about creating that dynamism to move and flow with AI because it's moving so fast.

Um, that's the only way that we thought we could do it competitively. >> Yeah, that makes a lot of sense.

I mean, you did talk about that with, you know, moving so fast, you really do need an expert.

Uh, again, it's the Dan Ies Wedbush AI Revolution ETF.

Your ticker is IVES.

So, how might an ETF like Ives be used or fit into an investor's portfolio?

So when you when you think about AI um and this really is the fourth industrial revolution we're witnessing right now.

I think it has to be considered as a as not a a sec a a cyclical thing but more of a secular position within a core holding in a portfolio.

Um you know tech led the market for the last 20 years and I think that will continue to accelerate and AI really is the the tip of that sphere. um not only from a capex standpoint, but if you look at how it's kind of infused and started to to touch on almost everything that we do as consumers in our social life and now it's bleeding into enterprise and work life and I think that trend is going to continue.

So I think viewing this alongside other broad equity indexes that you may have the S&P 500 or taking some of that large growth Q exposure um and and shifting that into something like IV just to get more targeted exposure directly towards AI um I think is something that if if you don't do now we're going to look back in 20 years and it's going to be a big missed opportunity because it's just so much growth and it so much of the backbone of I think what's going to drive the economy over the next decade is in AI. >> Absolutely.

It is indeed an exciting time to be alive and an exciting time to be in the market.

Colin Rogers, thank you so much for joining us.

We really appreciate it. >> Thanks, Stephanie.

Great to be here. >> Well, many investors are drawn to dividend paying stocks for their regular income stream.

However, a significant, often overlooked cost is something called tax drag.

Well, the new ETF from Lion Shares aims to reduce the frictional cost of taxes when it comes to dividends.

And here to explain more is Sophia Massie, CEO at Lion Shares.

Sophia, thank you for joining us. >> Thanks so much for having me. >> And congratulations on the launch of Lion Shares US equity total return ETF.

And the ticker there is to t uh TOT.

The fund is actively managed and it aims to reduce the tax drag of dividend payments, which of course everyone is happy about.

Um why no dividends and what is TOT's goal for generating returns? >> Exactly.

So TOT strategy, it's right there in the ticker.

We track the total return of the total US stock market.

And what that total return goal means, instead of paying dividends out to shareholders, we actually keep those dividends inside of the ETF where they remain invested and continue compounding.

The great benefit of this is that it can actually uh improve after tax returns.

And by keeping the funds inside, keeping those returns inside of the ETF, investors no longer need to reinvest their dividends and overall just creating a much more efficient product. >> Yeah, and that makes a lot of sense.

Uh, absolutely.

So, tell us more about Tot's portfolio holdings.

Um, what types of investments that the fund might look to acquire? >> Totate, it's actually fairly simple.

We hold other ETFs and other ETFs that track the total market.

The reason behind this is we're able to use a novel type of strategic rebalancing um to avoid the need to pay dividends to our investors and you know have that goal of minimizing distributions.

And what a lot of investors don't realize as they're chasing these ETFs with higher yields, those dividends are actually taxed at the federal and perhaps state and city level as well.

So it can actually be quite punitive.

And when you're looking at a long-term holding, especially for something like a broad US equity holding that you want to keep in your portfolio years after years, that compounded effect of that tax dread really, really eats away at your returns.

If you think about it, you know, over a 10-year period, you can actually be having returns that are roughly 12% lower than you could otherwise have if you instead held your uh exposure to the broad market via a total return product as opposed to, you know, a regular dividend paying fund. >> A lot of people may not know that.

It's great to have something like this, a tool like this for investors.

How do you see financial adviserss and investors potentially using TOT inside a diversified investment portfolio?

Tot is a great product to have if you're looking for diversification.

So, we're seeking to track the total US stock market.

That means we're looking at the whole market.

We're taking a slice of it and we're giving that to investors.

You're getting exposure to over 2,000 companies.

The idea there is tot the the core holding of a long-term investor's portfolio.

We're really focusing on lowering costs, maintaining that tax efficiency, making this a product that you can really efficiently hold year after year and provide that foundational exposure to the broad market that a lot of investors want to have as their core building block.

And when I think about product development, my background, you know, is actually in trading.

So I used to be a quant trader at Jane Street.

I know ETFs inside and out.

That was my bread and butter.

I did the trading that enabled a lot of ETFs to operate.

So I really want to approach product development from this perspective of having innovative products that are giving investors something that can't be accessed otherwise.

So TAT is one of the first products that's providing this total return exposure to the total market and really trying to provide investors with something that they can't get otherwise.

Um you might think this sounds great.

Why doesn't it exist in a mutual fund?

Why doesn't it exist as a hedge fund?

This strategy it's specific to ETFs.

We're using ETF rebalancing and the way that the ETF rapper is unique in order to make this strategy possible and that's why it's so new and so exciting to bring this to investors. >> All right, Sophia Massie, thank you so much for your insights.

Best of success with your latest ETF. >> Thank you. >> Well, that does it for today's episode of First Look ETF.

If you enjoyed the show, please tell us in the comment section below and by hitting the like button.

We want to give a big thanks to all of our guests along with Bal Little at the New York Stock Exchange.

Be sure to check out ETF central.com to learn more.

I'm Stephanie Stanton with ETF Guide.

Thank you so much for watching.

We'll see you next time.