The rise of artificial intelligence (AI) investing has been evident in Nvidia’s performance over the past year. However, the challenge lies in identifying which businesses will thrive in this new era of tech innovation. To mitigate the risk of choosing the wrong stocks, investors can opt for AI exchange-traded funds (ETFs) instead. These funds invest in companies positioned to benefit from the growing adoption of AI in various industries, categorizing them as enablers, engagers, or enhancers of AI technology.
There are seven AI ETFs that can potentially drive value in a portfolio as AI continues to transform businesses and homes. These ETFs may include companies that provide core components for AI development, incorporate AI into their core products, or contribute to the AI ecosystem without directly selling AI solutions. Investors interested in long-term growth can consider these ETFs, as most of them offer minimal dividends and focus on capital appreciation.
The methodology for choosing the best AI ETFs includes evaluating their expense ratios, net asset values, and portfolio diversity. Forbes has compiled a list of seven top AI ETFs with expense ratios ranging from 0.10% to 0.65%. These ETFs vary in terms of their investing strategies and key advantages, offering investors a range of options to consider based on their investment goals and risk tolerance.
Some of the top AI ETFs include Vanguard Information Technology ETF (VGT), Fidelity MSCI Information Technology Index ETF (FTEC), and SPDR S&P Kensho New Economies Composite ETF (KOMP). These ETFs track indexes that include companies involved in transformative innovation in robotics, automation, AI, connectedness, and processing power. Each ETF has its unique focus and may appeal to different types of investors based on their preferences and investment strategies.
Other notable AI ETFs mentioned in the article include iShares Robotics and AI Multisector ETF (IRBO), First Trust Nasdaq AI and Robotics ETF (ROBT), Defiance Quantum ETF (QTUM), and Invesco AI and Next Gen Software (IGPT). These ETFs offer exposure to different aspects of AI technology, such as robotics, quantum computing, and software development. With varying expense ratios and investment strategies, investors can choose the ETF that best aligns with their investment objectives.
In conclusion, the rise of AI investing presents opportunities for investors to capitalize on the growing adoption of AI technology across industries. By investing in AI ETFs, investors can gain exposure to a diversified portfolio of companies positioned to benefit from AI innovation. Whether seeking long-term growth or looking for specific exposure to AI technologies, investors have a range of AI ETFs to consider for their investment portfolios.
