Artificial intelligence will continue to be a growing investment theme in 2025 and beyond, according to a tech fund manager who posted an 80% return in 2024. Beck Lee, chief investment officer of Hong Kong-listed exchange-traded fund Pando CMS Innovation ETF, said the fund selects stocks based on independent research that combines macroeconomic factors and company fundamentals. “With this ETF, we use a combination of top-down and bottom-up research to build this portfolio,” Lee told CNBC Pro from Hong Kong. “A top-down approach helps identify themes such as social impact. [Federal Reserve’s rate decisions]“A bottom-up approach helps identify stocks with solid fundamentals.'' 3056-HK 1Y Line Lee suggests the fund's strategy aims for long-term rather than short-term gains. I did. The fund has held shares in Nvidia since its inception in December 2022. See Pando CMS Innovation ETF holdings below. is a long-term trend. It’s not just about one or two years,” Lee explained. He pointed to comments from Nvidia CEO Jensen Huang, who said AI has evolved over the years to understand vision and text, and is set to enter the physical realm. A highly concentrated portfolio of 17 stocks, including Microsoft, chipmaker Taiwan Semi, Spotify, Apple, Amazon, Netflix, Nvidia, Tesla and more, makes this fund one of the best performing actively managed funds. are. The global ETF returned 75% last year on an unweighted basis and has $10 million in assets under management, mainly because it is relatively new to the industry but has more than $500 in assets under management. The fund's management company, Pando Finance, which has assets of $1 million, was founded in Hong Kong in 2021, and its executives, including CEO and founder Jun Fei, have years of industry experience. There is. Mr. Ren previously served as an executive at Deutsche Börse Deutsche Börse and Zhenfund, one of China's largest venture capital funds. The firm also manages an ETF focused on companies operating on blockchain technology. CIO Lee said he leveraged his expertise in the crypto sector to identify MicroStrategy and Coinbase as holdings for the CMS Innovative Fund. MicroStrategy, whose stock price rose 358% in 2024, is widely viewed as a Bitcoin agent due to its leveraged holdings in Bitcoin. It was a top 10 holding in the Pando CMS Innovation ETF and contributed significantly to the fund's overall performance. Holdings Similarly, Nvidia and Spotify are among the fund's top 10 stocks with triple-digit gains in 2024. Lee said he expects Nvidia to continue outperforming as it drives structural change in the global economy through the proliferation of AI. But he warned that the company will struggle to maintain its current gross profit margin of about 75% in the future as competitors steal market share. “I think it will be difficult for NVIDIA to maintain its high profit margin of 75%. I think it will be.” [fall] Until late 60's[%]. “Maybe not next quarter, maybe next year,” Lee said. “But margins will start to come down.” Microsoft, one of Nvidia's biggest customers, has already started diversifying the AI processors it uses. The significantly cheaper AI chip from Broadcom, a California-based chip design company, owns 9.4% of the Pando ETF, and Broadcom accounts for 2.9% of the fund. Since its inception, the fund has held AI chip stocks, as well as chipmaker Taiwan Semiconductor, but some of the companies that criticized the fund's performance were down 18% and 26%, respectively. The fund will be phased out by the end of 2024.
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