Aura ETF has expanded its thematic lineup with the launch of the Aura VettaFi Photonics Index ETF (PHOX). The ETF offers targeted exposure to companies driving the next generation of artificial intelligence hardware. PHOX tracks the VettaFi AI Photonics Index, a benchmark designed to capture firms engaged in the generation, transmission, and processing of data using light-based signaling for AI computing.

Key Takeaways

• Aura launched the Aura VettaFi Photonics Index ETF (PHOX) to target companies solving critical AI hardware bottlenecks through light-based optical computing.
• The underlying index holds 25 stocks across a specialized six-layer AI photonics architecture. Final module integration and assembly is the leading segment with a 33.8% allocation.
• Over the past 12 months, the companies in the index surged 407.2% with a Sharpe ratio of 2.59 and an annualized standard deviation of 44.0%.

Solving the AI Data Center Bottleneck With Photonics

As AI workloads scale exponentially, traditional copper interconnects inside data centers face growing challenges. These legacy electrical connections suffer from bandwidth limits, high latency, and extreme power consumption. AI photonics replaces standard electrical signaling with light-based transmission, offering a crucial infrastructure solution to keep pace with hyperscaler demand.

PHOX tracks the VettaFi AI Photonics Index (AIPHTN). The index selects the top 25 companies by engagement and market capitalization across a six-layer AI photonics architecture.

Eligible constituents must derive at least 50% of their revenue from this ecosystem — or between 10% and 50% for materially engaged firms. China and Taiwan companies face stricter inclusion rules that require them to be principally engaged in architecture to enter the portfolio. Additionally, all constituents must meet liquidity criteria, including a minimum market cap of $100 million.

Portfolio Breakdown by Architecture and Geography

The index provides targeted exposure across the photonics supply chain. Layer 4 (final module integration & assembly) represents the largest sector allocation, at 33.8% of the index. This is followed by layer 2 (raw light & micro-optics) at 23.4%, and layer 3 (translators & optical intelligence) at 16.4%. Layer 1 (raw chemistry & materials) accounts for 11.6%, while layer 5 (physical highway & network) represents 11.0%. Finally, layer 6 (toolmakers & quality control) makes up 3.9% of the portfolio.

Geographically, the index maintains a global footprint dominated by the U.S. at 53.7%, followed by China at 34.2%. Canada represents 4.1%, Germany holds 3.6%, Taiwan accounts for 2.4%, and the Cayman Islands makes up 1.9%.

The portfolio holds a concentrated basket of 25 companies. The top constituents by weight include Zhongji Innolight Co (300308) (10.4%), Eoptolink Technology Inc (300502) (9.0%), Credo Technology Group Holding (CRDO) (8.0%), and Coherent Corp (COHR) (7.3%).

AI Photonics ETF Performance and Capitalization Profile

The underlying index provides access across the cap spectrum. The average market capitalization across the portfolio stands at $142 billion, with a median market cap of $49 billion. The largest constituent holds a market capitalization of $1.79 trillion, while the smallest sits at $398 million.

The companies in the index have collectively risen 72.6% over the past three months and 131.6% year-to-date. Over the past year, the group of AI photonics companies in the index has gained 407.2%, displaying a 44.0% annualized standard deviation alongside a 2.59 Sharpe ratio.

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VettaFi LLC (“VettaFi”) is the index provider for PHOX, for which it receives an index licensing fee. However, PHOX is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of PHOX.