VanEck ETF launches the first quantum computing ETF on the LSE

VanEck ETF announces the launch of the VanEck Quantum Computing UCITS ETF on the London Stock Exchange.

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Martijn Rozemuller, CEO of VanEck Europe

• Quantum computers are considered a key technology with great potential for research and industry, due to their exponentially higher computing power
• Driven by billions of dollars in investment, quantum computing is rapidly gaining momentum – but commercial success and broad market penetration are not assured
• Due to the still limited number of specialised quantum computer companies, VanEck’s ETF also includes diversified companies that are leaders in the research and development of quantum computers

Quantum computers were long regarded as pure theory – but the technology is now gradually becoming a reality. That’s why today, VanEck is happy to announce the launch of the VanEck Quantum Computing UCITS ETF, the first ETF in Europe that allows investors to make diversified investments in companies that research and develop quantum computing technologies or already hold relevant patents in this field.

Commenting on the launch, Martijn Rozemuller, CEO of VanEck Europe said, “We are currently experiencing the start of the quantum computer era. The theoretical foundations of quantum computers have been known since the late 20th century. But it is only in recent years that the idea has become a global wave of innovation— technology giants and governments are investing billions and over 10,000 relevant patents have been granted worldwide in the last five years alone. This is impressive proof that the quantum age has long since begun.” 1

According to the consulting firm McKinsey, the market for quantum computers could grow to up to 130 billion US dollars by 2040.2 Investors should note that investments in innovative technologies can be associated with increased volatility and specific risks – particularly as quantum computers are still subject to uncertainties, for example with regard to commercial usability and long-term economic success, despite initial concrete applications.

Exponentially higher computing power

A quantum computer is a new type of computer that can solve certain problems particularly quickly because, unlike conventional computers, they are able to calculate many different paths simultaneously. Classic computers use bits as computing units, each of which has either the value 1 or 0. On the other hand, quantum computers use so-called ‘qubits’ that can take on both values at the same time, so the computing capacity increases exponentially with the number of qubits used.

“Thanks to their extremely fast computing speed, quantum computers can solve selected tasks in a short time. It would take a disproportionately long time for normal computers to do the same,” explained Moritz Henkel, Product Manager at VanEck. “Last year, for example, Google used a quantum processor to solve a calculation task in less than five minutes that would have taken one of the world’s fastest supercomputers around 10 septillion years – a period of time that far exceeds the age of the universe.”

Quantum computers create new economic opportunities

“The potential economic implications of this enormous computing power are immense,” added Rozemuller. “For example, quantum computers could help to simulate complex chemical molecular structures and thus enable major advances in drug research. They are also capable of running through millions of different scenarios in a very short space of time, which can create brand new opportunities in sectors such as logistics and finance, in conjunction with artificial intelligence and machine learning, for applications such as self-driving cars. As with many other disruptive technologies, it is not yet possible to predict which companies will be the biggest beneficiaries of this development. By adopting a diversified investment approach with our ETF, investors can therefore position themselves broadly in this future area today.”

The VanEck Quantum Computing UCITS ETF invests in 30 companies worldwide – on the one hand, pure play companies that already generate the majority of their sales with quantum computing technologies or services. On the other hand, companies that are leaders in the research and development of quantum computers or are already using this technology are also eligible for the ETF. The selection is based on how many relevant patents have already been granted to a company in the field of quantum computer technology. “There are currently only a limited number of listed companies with a clear specialisation in quantum computers – the leading ones include IONQ, Rigetti and D-Wave. In order to be able to offer a broad-based and investable portfolio, the ETF also includes established technology, industrial and financial companies that are actively advancing the field of quantum computing – including IBM, Alphabet, Honeywell and Bank of America,” says Product Manager Henkel. Investors should bear in mind that the high volatility of technology stocks can lead to considerable fluctuations in the value of the ETF. In addition, the chosen approach may mean that the ETF also contains companies whose economic development is only partially linked to quantum computing. The associated uncertainties can limit the long-term relevance of individual securities.

Source: ETFWorld