Defiance ETFs
The flagship Quantum Computing ETF (QTUM) of Defiance ETFs officially topped $3.5 billion in assets under management (AUM). This achievement comes at the same time as the fund received a distinguished 5-star Morningstar Rating, which is a reflection of its exceptional risk-adjusted performance over the previous three and five years in the technology category.
QTUM has become the main avenue for investors looking for diversified exposure to the “foundational computing infrastructure of the future” as quantum computing moves from theoretical research into real-world commercial and national security applications.
Proven Risk-Adjusted Performance
Based on the fund’s risk-adjusted returns until December 31, 2025, Morningstar has given it a 5-star rating. In particular, QTUM was graded for the three-year period against a peer group of 220 funds and for the five-year period against 119 funds (or as much as 197 in some publications) in the Technology area. The 5-star rating is a marker for the top 10% of products in its category since Morningstar’s approach pays more attention to downward deviations and recognizes funds that exhibit consistent performance.
By January 31, 2026, QTUM had produced a total return of 394.13% since its launch on September 4, 2018. As evidence of the growing momentum in the machine learning and quantum fields, the fund returned 42.12% at NAV, net of fees, during the year that ended in early 2026.
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Rethinking “Core” Technology Exposure
QTUM’s expansion is indicative of a larger change in the way institutional and individual investors perceive technology investments. Defiance ETFs’ chief investment officer, Sylvia Jablonski, speculates that conventional tech benchmarks might not offer the exposure required for the upcoming innovation age.
Jablonski said that investors are “rethinking what constitutes core technology exposure.” Traditional benchmarks, she pointed out, are frequently significantly biased toward software-as-a-service (SaaS) models, which are becoming more and more susceptible to disruption from developments in artificial intelligence and quantum computing. Therefore, QTUM is intended to function as a new core technology allocation, concentrating on the businesses developing the software and hardware frameworks needed for the upcoming computing age.
Strategy and Portfolio Composition
Following the BlueStar Quantum Computing and Machine Learning Index (BQTUM) is the goal of QTUM, a rules-based strategy. Globally, this index monitors liquid businesses engaged in embedded AI chips, superconducting materials, software, and quantum hardware.
The fund had 85 holdings as of February 2026. Prime quantum businesses, semiconductor heavyweights, and industrial leaders are among the top holdings:
- Quantum Emotion Corp (QNC CN)
- Teradyne Inc (TER)
- Micron Technology Inc (MU)
- ASML Holding NV (ASML)
- Lockheed Martin Corp (LMT)
The fund may capture development in quantum computing and AI-driven innovation’s underlying technologies, such as improved semiconductors and cloud infrastructure, using this diversified approach.
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The AI and Quantum Intersection
Make clear that quantum computing is no longer a specialized field of study. It is increasingly thought to be the cornerstone of the upcoming AI revolution. Unlike classical computers, which utilize bits, quantum computers employ qubits, which use entanglement and superposition to execute calculations at speeds that are significantly faster than those of contemporary computers.
Defiance pinpoints four main causes for the surge in demand for QTUM:
- Quantum Supremacy: Supercharging AI strength to unimaginable levels.
- Machine Learning Transformation: Quantum-supported ML can alter business, risk, and cybersecurity.
- National Security: Advanced computing’s prominence in defense applications.
- Boundless Potential: Quantum progress is paralleled to the early days of personal computers, when growth was undefined but boundless.
Market Context and Issuer Profile
Both the expansion of institutional investor engagement and consistent net inflows have contributed to QTUM’s asset growth. Established in 2018, Defiance ETFs has established a reputation for being a leader in the development of leveraged and themed products. Apart from QTUM, the company has lately added specialty products like ASTN (a 2X Short ETF of AST SpaceMobile Inc.) and COPZ (a 2X Long Copper Miners ETF) to its inventory.
Risks and Opportunities
Although the fund has performed well, the point out that it is not diversified, which means that it might allocate a larger portion of its assets to fewer issuers, thus leading to higher volatility. Furthermore, quantum computing applications are still in the early stages of investigation, and it is unclear when returns will be realized.
The value of equities in the IT industry is still especially susceptible to fierce competition, government regulation, and quick product obsolescence. The prospectus should be carefully read by investors because past performance does not guarantee future outcomes.
As of late February 2026, QTUM, which has an expense ratio of 0.40% and a net asset value (NAV) of roughly $115.33, is still trading on the NASDAQ under the ticker QTUM.
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