Defiance launches Europe’s first photonics UCITS ETF PHOT

Defiance has launched Europe’s first photonics UCITS ETF, listed under the ticker PHOT. HANetf announced the fund and it is structured as a UCITS vehicle for European investors.

The ETF targets companies that develop, manufacture and commercialise photonic technologies, the optical hardware that generates, moves and processes data using light rather than electricity. The fund is intended to capture firms across the photonics value chain as spending on AI and data-centre infrastructure rises. JP Morgan estimates global AI and data-centre infrastructure investment could exceed USD 5 trillion through 2030.

Photonics refers to optical hardware that replaces or complements electrical connections in data centres and networks. Optical interconnects and photonic chips transmit data between processors, memory and networking equipment at higher speeds and with lower energy loss than copper cabling. As AI clusters and inference workloads grow, continuous movement of large data volumes creates bottlenecks in bandwidth, latency, power consumption and heat; photonic solutions move more data over longer distances while using less power per bit.

The Defiance Photonics UCITS ETF provides exposure across optical components and light sources, photonic semiconductors and interconnect chips, optical systems and networking equipment, photonic foundries and manufacturing infrastructure, and enabling materials. Technologies covered include lasers, optical transceivers, fibre arrays and connectors, photonic integrated circuits, optical interposers and modulators used in optical connectivity.

This is Defiance’s fifth launch since the firm entered the European UCITS ETF market earlier this year. Across its product range the firm has accumulated USD 162.57 million in assets under management. Defiance presents PHOT as a way for investors to obtain concentrated exposure to companies building optical hardware rather than having photonics only as a small part of broader technology funds.

Sylvia Jablonski, chief investment officer at Defiance ETFs, commented that AI is generating more data than electrical connections can efficiently move and that photonics uses light to transmit and process information. Hector McNeil, co-founder and co-CEO of HANetf, noted the launch gives European investors targeted access to companies helping to build the optical backbone for AI, cloud computing and digital connectivity.