In August 2021, Ivana Delevska launched her fund with a keen sense that artificial intelligence (AI) would be a significant player in the investment world. With a background in hedge funds at Citadel, Millennium, and Tiger Management, Delevska’s expertise lies in the industrial sector, where she interacts with over 100 companies. By closely observing where these companies were allocating their resources, she was able to foresee the AI boom. This foresight allowed her to identify trends ahead of the curve, giving her fund, Spear Alpha ETF (SPRX), a competitive edge.
Delevska’s SPRX, which currently manages $70 million in assets, boasts around 26 holdings, all poised to benefit from AI in some form. She emphasizes that AI is the most dominant theme in her portfolio, influencing approximately 95% of her investments. This strategic positioning has been fruitful for SPRX, delivering a remarkable growth of over 60% in the past year, outperforming well-known funds like the Ark Innovation ETF led by Cathie Wood, which saw a mere 21% increase during the same period.
The Role of Nvidia in Spear Alpha ETF
An essential component of Spear Alpha ETF’s success lies in its significant investment in Nvidia, with the chip giant accounting for nearly 11% of the fund’s holdings. Delevska made a bold move by overweighting Nvidia in 2023 when the stock was undervalued and out of favor. This decision paid off handsomely as Nvidia’s stock skyrocketed by over 220% in the following year. Looking ahead, Delevska anticipates a more defensive role for Nvidia in the portfolio, projecting a 30% to 40% return over the coming years.
While AI takes center stage in Spear Alpha ETF’s strategy, Delevska also incorporates other themes such as enterprise digitalization, space exploration, and decarbonization into her investment approach. Despite diversifying into these areas, Delevska clarifies that Spear Alpha ETF does not follow a thematic investing style. Instead, the fund derives its investment themes directly from the companies it covers, mirroring the approach of running a long book at established funds like Citadel.
Spear Alpha ETF has garnered significant investor interest, with $54 million flowing into the fund in 2024, as reported by FactSet. In contrast, Cathie Wood’s ARKK fund experienced outflows of $1.36 billion in the same year due to investor disillusionment over its performance. Delevska’s astute investment strategies and proactive approach to identifying emerging trends have positioned Spear Alpha ETF as a standout performer in the competitive landscape of ETFs.
Ivana Delevska’s Spear Alpha ETF stands as a testament to the transformative power of AI in shaping investment decisions and driving portfolio growth. By incorporating AI as a core theme and making strategic investments in companies like Nvidia, Delevska has not only stayed ahead of the curve but also delivered substantial returns for her investors. As the landscape of finance continues to evolve, funds like Spear Alpha ETF serve as beacons of innovation, paving the way for a new era of intelligent investing.