(Bloomberg) — For most of its six-year life, the Defiance Quantum ETF behaved just like any other high-tech long shot: Unexceptional returns and meager investor interest kept it stuck among the investing also-rans that dot the exchange-traded fund landscape.
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All that changed in the span of a nanosecond after Google-parent Alphabet Inc. announced a big breakthrough in quantum computing earlier this month. Now, flows for the fund, which trades under the ticker QTUM, are surging like never before.
QTUM, which was designed to track stocks of companies tied to quantum computing, has seen roughly $250 million of inflows so far in December, an amount that puts it on track for its largest monthly cash haul since launching in 2018, data compiled by Bloomberg show. It has gained 17% in the period. Prior to this year, QTUM had taken in a net $164 million since inception.
The inflows started to pick up earlier this month following news that Alphabet had achieved a major accomplishment in quantum computing through the use of its Willow quantum chip. The company said that its quantum computer needs only five minutes to solve a problem that would take a supercomputer around 10 septillion years to do. Shares of Alphabet rose in the wake of the announcement, and other stocks linked to quantum computing have also extended advances in recent days.
“Quantum is having the same moment as AI did last year. Many of the quantum stocks aren’t held by ETFs broadly so QTUM is really the only pure play out there,” Bloomberg Intelligence’s Athanasios Psarofagis said. “I wouldn’t be surprised to see more quantum-related filings soon.”
Quantum computing involves using the mechanics of quantum physics to make more powerful computers. Such computers can do things that standard ones can’t, including modeling out complex webs of items that involve many inputs and moving parts. Specialists in the field are hoping that these computers will produce leaps and breakthroughs in fields from drug development to financial modeling.
QTUM tracks an index that’s made up of companies including D-Wave Quantum Inc., Rigetti Computing Inc. and IonQ Inc., among others, as well as Alphabet and Nvidia Corp. D-Wave — a Canadian firm that became the first to sell quantum computers in 2011 — is up more than 800% this year, while Rigetti has added more than 1,000%.
