Using Chip, LLM & Nuclear Energy Stocks in Next Wave of ETF Investing

Nicole (0:00)

ETF watchlist time. Joining me right now is Pedro Palandrani, Head of Product Research and Development at Global X ETFs. I'm so glad you are with us. You're gonna be talking to us about a few new ETFs that we wanna take a look at. In the meantime, how do you now gauge investor demand for the ETF space? What would you say?

Pedro Palandrani (0:21)

Yeah, look, I think the ETF industry continues to deliver on access to clients, and that's really what at Global X we continue to do, giving investors precise access to many of the investment opportunities that are longer term in nature. So when it comes to artificial intelligence, like you say, Nicole, AI is really expanding in terms of breadth and depth. Think about it, we started by looking at opportunities in hyperscalers, semiconductors, where we house semiconductors in data centers, what's powering those data centers. But also in terms of depth, if you take a look at semiconductors, we then realized there was a massive opportunity in memory. But nowadays, there are other areas like microlayers, ceramic capacitors, some technologies that are AI bottlenecks, that are very important for that next wave of AI CAPEX. We believe that's what investors are really after, getting exposure to very targeted, precise ETF investment solutions.

Nicole (1:16)

I want to talk about those. But just overall, the ETF fund flow for 2026 at a record, still, I mean, are we looking at, I know it has been, I don't know how the fund flows have been most recently, but will this go down as a record year? And do you think that could continue? You talked about investors' access and interest in some new ETFs.

Pedro Palandrani (1:40)

It's really the early days for the ETF industry. I truly mean it. Yes, we have over 5,000 ETFs already in the marketplace, but I would say by the end of the decade, we're probably gonna double the number of ETFs. There's a lot of innovation happening at the frontier, whether that's with access to private markets, whether that's to access to prediction markets that's coming in and being very important. But beyond that, thematic investing, income, international access, there's so many ways where you can use the beauty of the ETF wrapper to continue to bring access to investors around the world.

Nicole (2:15)

I know you've been looking at all the shifts and what people are most interested in. So let's start here with a few that you brought to us today. MLCC, the electronic components. Where does that fit into the story?

Pedro Palandrani (2:29)

Yeah, look, like I said before, micro layers, ceramic capacitors or MLCCs are very, it's a technology that you can find in any electronic component. If you have your smartphone, you have about 1,000 or 2,000 MLCCs within your smartphone. If you look at the next gen of AI servers, they're using about 30,000 to 40,000 MLCCs in a single server. So as you see, that it capex going to semiconductor, to hardware, to memory. MLCCs is a technology that you can find everywhere. Essentially, you can think about it as mini batteries. They're storing energy when there's a spike in demand for electric capacity. They're able to manage that in a very smooth way, which prevents semiconductors and hardware. They're very expensive to have any type of error for that matter. So MLCCs are now produced by Asian companies for the most part. The top five MLCC producers in the world account for 85% of total MLCC supply.

We believe there's a way for investors to get access to those companies like Murata, Samsung Electrical Mechanics and a few other companies.

Nicole (3:38)

I think Samsung and TDK are two names people definitely know. What about when we look at LLMA, the Large Language Models?

Pedro Palandrani (3:49)

Yeah, look, everyone nowadays knows what a Large Language Model is. In this ETF, LLMA is really aiming to give access to investors, to that group of companies that are leading the way of development of large language models, whether you have your household names like Meta, like Google, but also new entrants and of course, as we see the IPO market companies that are probably going to IPO later this year, early next like Anthropic and potentially OpenAI, you'll get access to those type of companies. But it's not only a US historian, I think that's a very important message for investors. When it comes to large language models, you also have China, a very competing market.

We saw not too long ago that deep seek moment. There are so many development and of course, a push for development in China and other places around the world. So DCTF is really aimed at giving investors that access to large language model companies that are focused primarily on that development.