Fund managers using advanced artificial intelligence models to gain an edge over the market have been put on notice following the launch of the first Australian exchange-traded fund that will also use the technology to select stocks.
VanEck announced on Tuesday that one of its ASX-listed international ETFs, which trades under the ticker GOAT, will start tracking a new index this month that uses AI agents to simulate millions of market scenarios to adapt its portfolio to changing macroeconomic conditions.
The index was developed by VanEck and Seoul-based AI and quantitative index specialist Akros Technologies and uses so-called generative reinforcement learning to autonomously pick stocks that are based on future outcomes.
VanEck said it gave retail investors cheaper access to AI-powered stock picking, which is a strategy used by high-profile money managers such as Sydney hedge fund Minotaur Capital and other quantitative trading firms.
“What was once the exclusive preserve of multibillion-dollar quant shops with floors of PhDs is now accessible to every Australian with a brokerage account,” said VanEck head of Asia-Pacific Arian Neiron.
Minotaur is weighing the launch of its own ETF, but said it was highly unlikely this year. The firm added four new AI agents in June, which takes “the team to 22 investment agents and five operations agents”.
Removing emotion
VanEck’s ETF will be rebalanced each month by an AI model that sifts through around 1200 of the world’s largest companies in developed markets outside Australia, and then calculates a score for each based on more than 10,000 signals.
These include a stock’s fundamentals, such as valuation and earnings, as well as technical factors such as momentum, and macroeconomic indicators, including GDP and inflation.
The model then selects the 150 stocks that have the highest probability of outperforming the market.
The top 10 holdings in the Akros index currently include well-known technology giants such as Apple, Nvidia, Alphabet, Microsoft and Tesla, as well as oil and gas major ExxonMobil and heavy equipment manufacturer Caterpillar.
“The industrialisation of alpha is underway, and it will be as consequential for asset management as indexing was in the 1970s,” Neiron said. “AI doesn’t get anchored, it doesn’t get emotional, and it doesn’t have career risk that stops it from being early.”
VanEck’s ETF currently tracks the Morningstar Developed Markets ex-Australia Wide Moat Focus Select Index, which has significantly underperformed the MSCI World ex-Australia Index since it started trading in September 2020.
In contrast, a simulated track record for the Akros Enhanced World ex-Australia Index has delivered 12.6 per cent a year since July 2005, outperforming the MSCI index by 3 percentage points annually.
“What is compelling about the simulated record is not just the return premium – it is where that premium was earned,” Neiron said. “The strategy’s strongest relative performance has come in stressed, weak-cycle conditions.”
ETF rival GlobalX said it had no immediate plans to launch a similar product, while BetaShares declined to comment on upcoming fund launches.
The introduction of AI-powered stock picking to Australia’s ETF market coincides with a busy start to the new financial year for VanEck, which is also launching its Global Semiconductor ETF, Rare Earth and Strategic Metals ex-China fund, and a Quantum Computing ETF on the ASX.
It adds to the wave of new ETFs flooding the domestic bourse after a record 72 new funds were listed in the 2026 financial year, up from 50 in the prior year. There are currently 458 exchange-traded products on the Australian sharemarket.
The flurry of ETF launches has been fuelled by booming demand among retail investors looking for a cheap and tax-effective way to access the world’s hottest investment themes.
All about chipmakers
Semiconductor stocks were the defining trade for FY26 as investors scrambled for access to companies powering the global AI supply chain. Australian semiconductor ETFs attracted around $290 million in net inflows over the year, including a record $131 million in June alone.
“The AI story evolved significantly over the past financial year,” said Global X investment strategist Marc Jocum. “Investors moved beyond the companies developing AI software and increasingly focused on the hardware required to make AI possible – semiconductors have become the critical infrastructure underpinning this next phase of technological innovation.”
The Global X Semiconductor ETF was Australia’s top-performing ETF for FY26, returning a whopping 166.8 per cent. That was closely followed by the iShares MSCI South Korea fund, which returned 166.3 per cent.
The rally was driven by strong demand for advanced chips, high-bandwidth memory and AI servers, with companies across Asia playing an increasingly important role in the global supply chain.
South Korean technology leaders, alongside global memory manufacturers, benefited from accelerating investment in AI data centres and computing capacity.
“Investors are realising that the biggest bottleneck for AI is the physical infrastructure required to process and store enormous amounts of data,” Jocum said.
The semiconductor sector was one of several technology and innovation themes that delivered huge returns over the financial year. Hydrogen, biotechnology, lithium and battery technology, and critical minerals were also among Australia’s top 10 performing ETFs.
Source: https://www.afr.com/markets/equity-markets/asx-s-first-ai-powered-stock-picking-etf-puts-quant-funds-on-notice-20260707-p60d6a