In a recent episode of Behind the Ticker, Adam Patti, founder and CEO of VistaShares, discussed the launch of the VistaShares Artificial Intelligence Supercycle ETF (ticker: AIS) and how it differentiates itself in the growing AI investment space. With over two decades in the ETF industry, Patti previously founded IndexIQ, one of the earliest issuers of liquid alternative ETFs, which was later acquired by New York Life. After spending several years outside the industry, Patti partnered with John McNeil of DVX Ventures to launch VistaShares, focusing on building high-quality thematic ETFs with a more thoughtful and targeted approach.Patti explained that AIS is designed to provide pure exposure to the AI supercycle by focusing exclusively on the infrastructure driving artificial intelligence, particularly in data centers and semiconductors. Unlike many AI-themed ETFs that hold broad tech exposure dominated by the "Magnificent Seven" stocks, AIS takes a supply chain-driven approach, investing in companies that manufacture the essential components—such as GPUs, VRAMs, cooling systems, and fiber optic networks—needed to power AI. By analyzing the bill of materials for AI data centers and semiconductors, VistaShares identifies companies with substantial AI-driven revenue, ensuring that the fund is directly tied to AI growth rather than being diluted by large-cap tech names with only partial AI exposure.AIS follows a rules-based, actively managed strategy that combines systematic supply chain analysis with an active overlay. The core portfolio is constructed based on a transparent, rules-driven methodology—one that VistaShares has filed for a patent on—ensuring that holdings are determined by their relevance to AI infrastructure rather than arbitrary weightings. The fund undergoes a semi-annual rebalance, but Patti emphasized that the active overlay allows for adjustments in response to new developments in the rapidly evolving AI space. The investment committee, which includes AI industry practitioners such as former Tesla president John McNeil and AI entrepreneur Sonny Madra, helps identify emerging trends, new players, and risks within the AI ecosystem before they become widely recognized.Patti also highlighted the global nature of the AI supply chain, with AIS holding companies from the U.S., Taiwan, China, and Europe. Currently, about 60% of the portfolio is U.S.-based, with the remainder distributed across key AI manufacturing hubs. Looking ahead, VistaShares has the flexibility to expand the portfolio’s focus, potentially incorporating consumer-facing AI applications and energy solutions as the industry matures. However, for now, the fund remains centered on AI infrastructure, which Patti believes is still in the early stages of exponential growth, as evidenced by record-breaking capital expenditures from major tech firms.For investors and advisors looking to incorporate AIS into portfolios, Patti suggested a 3-5% allocation within a core equity strategy, positioning it as a high-conviction growth satellite.
Deeper Dive: Insights from the Full Conversation
Beyond the headline strategy, the full conversation between Brad and Adam Patti covered several additional themes worth highlighting for advisors and investors.
On Process and Philosophy
I was way back in the early days of the ETF market. But they gave me the first taste of the market and the growth prospects and how interesting the ETF wrapper was for investors and how efficient it is to use it portfolio. So fast forward, I ended up taking that knowledge and founding a company in 2006 called Index IQ. We were one of the early ETF issuers. I think we were the 18th or so that launched. And we focused on liquid alternatives trying to package institutional quality alternative investment strategies in the ETF wrapper.
You know, we won't be we're not going to make active trades for the sake of being active. We're going to do it if we think there's a significant risk or opportunity that needs to be addressed. So speaking about like geographic exposure. Or is this go anywhere you evaluating opportunities in emerging markets outside of the U.S. or is it pretty much just domestic? There's companies all the world that are providing significant innovation into the space. About 60% of the portfolio is currently a U.S.
Market Context and Positioning
So before we get started, wanting to take a little bit of time and tell everybody a little bit about your background and how you ended up founding VistaShares. Sure, I've been in the ETF market dating back way back to around 2001 where I was running. Among other things, a division over a time warner called Fortune Index is where we created a stock index based on the Fortune 500. We used that index to create an ETF with state street, the triple F was a ticker.
So let's say in the cooling system, there's a hundred million dollars in AI. AI data center projects and there's four companies in each in that that are that have met our criteria. And one of those companies has 50 million of the hundred million. We are market share weight them within the, within the segment. So the company that has 50 of the hundred million will get 50% of the 25% And the other countries will split the remaining based on based on how much revenue they're bringing to the table.
The other piece is the energy piece. That's another piece that we have the flexibility to bring in as well. Once that gets to the point where it's more investable and a little more mature. So you would mention, which I agree with you, a lot of these AI centered focused ETFs right now are heavily weighted and the video Microsoft, you guys are much more diversified in terms of underlying holdings. I believe it last look and don't quote me on this, there's, you know, some like 72 companies across various segments of the supply chain.
Key Takeaways
- In a recent episode of Behind the Ticker, Adam Patti, founder and CEO of VistaShares, discussed the launch of the VistaShares Artificial Intelligence Supercycle ETF (ticker: AIS) and how it differentiates itself in the growing AI investment space.
- The fund undergoes a semi-annual rebalance, but Patti emphasized that the active overlay allows for adjustments in response to new developments in the rapidly evolving AI space.
- Currently, about 60% of the portfolio is U.S.-based, with the remainder distributed across key AI manufacturing hubs.
What This Means for Advisors
For financial advisors evaluating options for client portfolios, this conversation with Adam Patti highlights important considerations around growth investing. Understanding the strategy behind each fund—not just the ticker—helps advisors make more informed allocation decisions and better communicate the rationale to clients.
The themes of growth investing and portfolio construction discussed in this episode are particularly relevant in the current market environment, where advisors are increasingly looking for differentiated solutions that go beyond traditional benchmarks.
Listen to the Full Episode
This article is based on an episode of Behind the Ticker, hosted by Brad Roth, Founder and CIO of THOR Financial Technologies. For the full conversation with Adam Patti, including additional nuances and details, listen on Spotify, Apple Podcasts, or watch on YouTube.