For investors looking to gain exposure to companies at the forefront of quantum computing, artificial intelligence, and machine learning, the Defiance Quantum ETF (QTUM) may be an option. Launched in September 2018, the ETF tracks the BlueStar Quantum Computing and Machine Learning Index, which focuses on companies leveraging quantum and AI technologies to drive innovation and solve complex problems. The index tracks approximately 71 globally-listed stocks across all market capitalisations.
Defiance Quantum ETF Performance, Price & Chart
As IBM explains: “Quantum computing is an emergent field of cutting-edge computer science harnessing the unique qualities of quantum mechanics to solve problems beyond the ability of even the most powerful classical computers.”
As a result, it is an emerging field that is expected to transform industries such as cybersecurity, pharmaceuticals, finance, and logistics. QTUM offers a way to invest in this potential via a portfolio of companies, including Ionq Inc., Palantir, Teradyne and more.
At the end 2024, QTUM’s total net assets were $680.25 million.
Defiance Quantum ETF Performance
Since around October 2022, the QTUM ETF has performed extremely well. Through 2024, it ended up 53% for the year-to-date and over 47% in the last three years.Â
| Year | Total Return |
|---|---|
| 2024 | +53% |
| 2023 | +39.88% |
| 2022 | -28.79% |
| 2021 | +35.18% |
| 2020 | +42.13% |
QTUM Top Holdings (Beginning 2025)
| Company | Weight (%) |
|---|---|
| D-wave Quantum Inc | 2.68% |
| Rigetti Computing Inc | 2.14% |
| Ionq | 2.08% |
| Palantir Technologies | 1.58% |
| Alchip Technologies | 1.56% |
| Teradyne | 1.50% |
| Tower Semiconductor Ltd | 1.48% |
| Taiwan Semiconductor Manufacturing | 1.47% |
| Marvell Technology | 1.45% |
| Onto Innovation | 1.43% |
QTUM Forecast
Bull Argument: According to technical analysis from Kavout, the ETF “exhibits a strong bullish sentiment with a Moving Average Score of 96,” which they state indicates “robust upward momentum.” The firm's analysis, which includes an assessment of various moving averages and oscillator indicators, shows that the oscillator score is more neutral. Meanwhile, when looking at macro bullish factors for the ETF, the disruptive potential of the names it holds can't be overlooked.
Quantum computing and AI are growing rapidly, with breakthroughs expected in fields like pharmaceuticals, cybersecurity, and logistics. As a result, its long-term growth is another factor to consider. As quantum computing and AI mature, QTUM’s investments in leading-edge companies could deliver outsized returns, especially as QTUM’s holdings span multiple industries, reducing concentration risk and increasing exposure to quantum’s broad utility.
Bear Argument: However, investors should note that quantum computing is still in its infancy, with many companies yet to achieve profitability. In addition, there is the risk of high volatility. The speculative nature of quantum technologies and the companies could lead to frequent price swings, making QTUM risky for conservative investors. While not a directly bearish factor for the ETF, competition could also impact some stocks it holds. As quantum computing progresses, smaller startups may face challenges from established tech giants with larger R&D budgets.
Our View: The Defiance Quantum ETF is a unique fund offering exposure to a transformative technology with vast potential. While the early-stage nature of quantum computing adds significant risk, QTUM does provide a way to invest in a sector that could revolutionise industries over the next decade.
For investors with a long-term horizon and a tolerance for volatility, QTUM could be an ETF to look at for an opportunity to gain exposure to cutting-edge advancements in quantum computing and AI.
Who Should Buy the Defiance Quantum ETF?
While the ETF and industry sounds exciting and has significant potential, it may not be best suited for all types of investors.
Innovation enthusiasts and investors who want exposure to emerging technologies with the potential to disrupt multiple industries may find the ETF an attractive addition to their portfolios.
The above goes for growth investors as well. Those seeking long-term capital appreciation through high-growth sectors may want to take a closer look at the fund, while investors looking to diversify portfolios with a focus on transformative technology will also see the ETF as a potential option.
Those willing to accept short-term volatility for potential outsized gains in the future may be more suited to the ETF.
However, risk-averse investors may want to give it a miss as the speculative nature and volatility of quantum computing investments may not align with their investing characteristics.
Income investors will also find that it does not align with their goals, as most companies in the portfolio prioritise reinvestment over dividends.
