iShares A.I. Innovation and Tech Active ETF

iShares A.I. Innovation and Tech Active ETF (BAI) is a BlackRock fund whose managers pick about 50 stocks tied to artificial intelligence. As of July 31, 2026, its largest holdings were chip and memory makers such as SK hynix, Micron and Broadcom. Its 0.55% expense ratio is below the 0.64% average of similar funds. It is also the largest fund in its group. But its 1-year return ranked last of nine similar funds as of October 29, 2026.

• Over the year to Oct 30, 2026, BAI returned +8.0%, 9th of 9 among similar funds.
• Its worst full calendar year was 2025 (+25.2%); its best was 2025 (+25.2%).
• The deepest fall in its price history was 34.1% (Jan 23, 2025 to Apr 8, 2025), recovered by Jul 16, 2025.

As of Jul 31, 2026, the fund held 51 securities; the ten largest made up 47.27% of assets. It also reported 3.52% in a money-market fund, most likely cash collateral from lending out shares rather than uninvested money.

By sector

• Over the three months to Jul 31, 2026, investors withdrew a net $27.6M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +15.81%, +5.76%, -21.39%.

BAI does not track an index. BlackRock's managers (BFA) decide what it owns. At least 80% of net assets must go into A.I., technology and technology-related companies. That test covers all three groups together, so the share in A.I. companies alone can be lower. The managers sort companies into eight layers of an "A.I. stack." The layers are power, accelerated computing, cloud infrastructure, A.I. models, data, data tools and infrastructure software, A.I. applications, and A.I. services. They look for companies that meet revenue or profit thresholds, or that they expect to become future leaders. Their research includes meetings with company management and their own forecasts.

The managers also choose position sizes. There is no fixed rebalancing schedule. The fund can buy companies of any size, anywhere, including in emerging markets and through IPOs (initial public offerings). It is "non-diversified," which means it can put more into a few stocks than a typical fund, up to 20% in a single company. Its 107% turnover means it replaced roughly its whole portfolio over a year. As of July 31, 2026, it held 51 stocks. The top 10 made up about 47% of the fund. About 68% was in US companies, 17% in Taiwan and 6% in South Korea.

The fund may use options, futures, swaps and currency contracts. It uses them to stand in for stocks or to hedge risks such as currency moves, but not to borrow its way into extra exposure (leverage). It held no derivatives as of July 31, 2026.

• BAI charges 0.55% a year, versus an average of 0.64% for the similar funds below (3rd of 9, cheapest first).
• Of that, 0.65% is the management fee; the rest covers other fund expenses.
• The fee includes a 0.1% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $58 in the first year and $802 over 10 years (assuming a 5% annual return).

It is a concentrated, actively managed bet on A.I. chip and technology stocks, and its swings have been far larger than the broad market's.

BAI could add focused exposure to A.I. chip, memory and software companies, but its track record is short. It launched on October 21, 2024, so it has no history from the 2008, 2020 or 2022 downturns. Its deepest drop was 34.1%, from January 23 to April 8, 2025. It got back to its old peak by July 16, 2025, about three months later. Its only full calendar year, 2025, returned 25.5%. Over the year to October 29, 2026, it tended to move about 2.7 times as much as the broad market. Anyone forced to sell during a drop like that would lock in a large loss. Income is small: a 1.39% trailing yield as of October 29, 2026, paid once a year. In the SEC's standard example, costs on $10,000 come to about $58 in the first year. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.