Regardless of which direction you want to take, there's an AI investing option for every investor
The AI sector is booming. Everywhere you look, there are new developments, new concerns and new products and services centered around it. AI as a technology has been around for a surprisingly long time, but it was thrust into the mainstream in late 2022 by OpenAI's ChatGPT.
It's growing so fast, that a large number of important individuals in tech have recently called for AI development to be paused, so that regulation can catch up. We're talking people like Elon Musk and Apple co-founder Steve Wozniak.
For investors, it's a big opportunity. Imagine being able to buy into Amazon or Apple stock back in the 1990s? Early AI investors have that same opportunity. But just like investing in internet companies before the dot com boom (and bust), it also comes with a lot of risk.
Any investment into new technology comes with risk, because there's no guarantee how it's all going to turn out.
For investors looking to invest in AI, we're going to cover a number of the most popular artificial intelligence ETFs out there. Keep in mind that these aren't investment recommendations, but with lots of other investors choosing to park their money in these ETFs, they're some research of your own.
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The first ETF on our list aims to invest in companies that are likely to benefit from the growth in robotics and AI. The ETF is heavily focused on industrial applications of AI, such as robotics used in car manufacturing.
But it's not their only focus, with holdings that represent companies building autonomous vehicles and non-industrial robots as well.
It's a high growth sector, with the global robotics market valued at $55 billion in 2021 and expected to grow to $91 billion by 2026.
Some of the biggest holdings in the ETF include NVIDIA, Keyence Corporation, Intuitive Surgical, Fanuc and Yaskawa Electric Corporation.
Another ETF with a heavy focus on robotics is ROBO. It invests in a diverse range of stocks in the robotics, automation and AI sectors. As well as investing in the tech more broadly, ROBO also has a focus on healthcare, where automation and artificial intelligence can help save lives, as well as drive investment gains.
ROBO has been around since 2013 and currently has $1.14 billion in assets under management. The ETF invests across 14 different countries and takes a multi-cap approach, meaning it invests in small companies, large companies and everything in between.
Some of the biggest holdings include Harmonic Drive Systems, Intuitive Surgical, Fanuc, IPG Photonics and Kardex Holding.
ARK is a big name in investment management and is run by well known fund manager Cathie Wood. The ARK Autonomous Technology & Robotics ETF is an actively managed fund which picks stocks that stand to win from advancements in automation, robotics and other cutting edge technology.
Wood is a big fan of Tesla, and like many ARK funds it is the top holding in this one too. It also holds positions in agricultural machinery companies such as John Deere and Komatsu. Perhaps not the most obvious AI investment, but these days much of the farming process is run completely by machines.
Other major holdings include 3D printing company Protolabs and robotics and automation company Teradyne.
This one's a little different. Rather than investing directly into companies that create products with AI, it instead uses AI to invest. The ETF uses a proprietary AI algorithm to invest in U.S. value stocks.
Overall the fund holds between 60-190 stocks, and makes the picks based on analysis of both company fundamentals and broader market sentiment. The portfolio of stocks is reviewed and on a monthly basis, and human fund managers have the final say over the holdings within the fund, making changes at their discretion.
The fund's major holdings are a diverse mix of U.S. large caps, including Comcast, Keurig Dr Pepper, Nasdaq, Intel and 3M.
The final ETF on our list, the First Trust Nasdaq Artificial Intelligence & Robotics ETF is another which invests directly into companies heavily using AI in development of their products.
The fund invests into companies which are categorized into one of three types.
The holdings of the ETF include C3.ai, Illumina, UiPath, Elbit Systems and Cadence Design Systems.
The bonus alternativeome AI focused ETFs invest into tech companies leaning heavily into AI, and others invest into mainstream companies by using AI. At Q.ai we do both. Our Investment Kits offer a wide range of different asset classes and sectors, based on our investors preferences, and managed on a weekly basis by our sophisticated machine learning algorithm.
The list includes some which create exposure to traditional assets, like the Value Vault Kit which invests in stocks that our AI believes are good picks for a value investor. Think Warren Buffet meets AI. Or the Active Indexer Kit, which provides broad spectrum diversification across a huge number of U.S. stocks through the use of ETFs.
For investors who want to invest in AI while using AI to run the portfolio, the Emerging Tech Kit offers exposure to some of the biggest names in tech, as well as small-cap up-and-coming companies, ETFs and even crypto.
Every week our AI analyzes a huge amount of data and predicts how the universe of securities in all of these Kits are likely to perform in the coming week. It then automatically rebalances the Kits in line with these projections.
AI isn't going anywhere anytime soon. Even if Elon Musk and friends get their way and we see a pause in new development, there are still huge implications for the state of AI in its current form.
Many companies are going to be able to capitalize on this new tech to drive new discoveries, products and services. In the end, that drives revenue, company value and shareholder returns.
So whether you want to invest in AI, with AI or a combination of both, there are plenty of artificial intelligence ETFs and options available for any investor.
Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Exclusive Capital communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.