ETF Express column argues index rules, not managers, choose BOTZ holdings

An ETF Express column published October 12 uses Global X's Robotics & Artificial Intelligence ETF (BOTZ) to argue that index methodologies, not fund managers, make active investment choices before a fund begins tracking. The fund's top 10 holds only Nvidia among the dominant US tech names and adds Fanuc, Keyence and ABB. The US version tracks an Indxx thematic index, the European UCITS version follows its v2 counterpart, and the column states plainly that it is not a commercial for the fund.

The column credits Elston Consulting portfolio strategist Andrea Acimovic with the observation that a portfolio holding global, S&P 500, technology, AI and semiconductor ETFs might tell the world "you really like Nvidia." The columnist then ran a version of that exercise with AI and found that almost nothing meaningfully shifted the mix away from Nvidia, Microsoft and Apple; funds carrying a tech or AI label, the column says, tend to deliver those names alongside Alphabet, Amazon and Micron.

Morningstar principal Kenneth Lamont is quoted in the column: "The investment decisions are still active in nature, they have simply been codified into an index methodology." He describes the active-passive split as a continuum, with market-cap-weighted index funds at one end, high-conviction stock pickers at the other, and thematic, factor, quantitative and systematic strategies in between.

For the indexing business, the argument puts the differentiated bet upstream at the index provider, while the ETF wrapper sells tracking and trading. The column's evidence is a hypothetical portfolio, not a performance comparison, so it is enough to show that similarly labelled funds can hold very different things — not that index funds outrun active ones.

State Street's four full-weight sector SPDRs, launched with a 0.12% annual fee, hold their Select Sector counterparts as a base and buy the largest names directly to match uncapped S&P 500 sector weights. In September we wrote about Wedbush's first ETF being a 0.75% Nasdaq-100 lookalike, a case where brand, label and holdings can point in different directions.