12 Best Artificial Intelligence (AI) ETFs To Buy In 2024: Pros & Cons
The growing Artificial intelligence (AI) market presents unprecedented investment opportunities for any investor who’s looking to diversify their portfolio.
Investing in an AI ETF (exchange-traded fund) can be one of the most accessible ways to get exposure to the AI industry.
But, are they entirely risk-free? Maybe not!
Let’s explore 12 top AI ETFs in 2024 and the pros and cons of investing in them.
Plus, we'll also explain why fine wine is another exciting and stable alternative investment you should consider.
Further reading
- Explore the different Types of Alternative Investment Platforms and the 10 Best Options.
- Find out if there are any Wine ETFs You Could Invest In.
12 Best AI & Robotics ETFs to Diversify Your Portfolio in 2024
An AI ETF tracks a basket of companies involved in developing or using artificial intelligence.
So instead of buying individual AI stocks, you can buy an AI ETF, representing ownership in a collection of these companies.
Let’s get going with our curated list of the 12 best AI ETFs:
- Global X Artificial Intelligence & Technology ETF (NASDAQ: AIQ)
- ROBO Global Artificial Intelligence ETF (NYSE: THNQ)
- iShares Robotics and Artificial Intelligence ETF (NYSE: IRBO)
- First Trust Nasdaq AI and Robotics ETF (NASDAQ: ROBT)
- ROBO Global Robotics and Automation Index ETF (NYSEARCA: ROBO)
- AI Powered Equity ETF (NYSE: AIEQ)
- QRAFT AI-Pilot US Large Cap Dynamic Beta and Income ETF (NYSE: AIDB)
- Ark Autonomous Technology & Robotics ETF (BATS: ARKQ)
- Roundhill Generative AI & Technology ETF (NYSE: CHAT)
- iShares Exponential Technologies ETF (NASDAQ: XT)
- Direxion Daily Robo AI & Automation Index Bull 2X Shares (NYSE: UBOT)
- SPDR S&P Kensho New Economies Composite ETF (NYSE: KOMP)
1. Global X Artificial Intelligence & Technology ETF (NASDAQ: AIQ)
Global X Robotics and Artificial Intelligence ETF is a passively managed fund that follows the performance of the Indxx Artificial Intelligence & Big Data Index.
The index includes companies that potentially stand to benefit from increased adoption and utilization of AI and robotics.
Top holdings: NVIDIA Corp, Meta Platforms Inc
5-Year ETF Performance Chart
Source: Google Finance
- Net assets: $219.74 million
- Average volume: 2.3 million
- P/E ratio (TTM): 29.27
- Net expense ratio: 0.68%
2. ROBO Global Artificial Intelligence ETF (NYSE: THNQ)
The ROBO Global Artificial Intelligence ETF mimics the performance of the ROBO Global Artificial Intelligence Index.
The fund’s portfolio includes companies developing the technology and infrastructure enabling AI, such as computing, data, and cloud services.
Top holdings: Alphabet Inc Class A, Microsoft Corp
5-Year ETF Performance Chart
Source: Google Finance
- Net assets: $31.34 million
- Average volume: 20,154
- P/E ratio (TTM): 38.12
- Net expense ratio: 0.68%
3. iShares Robotics and Artificial Intelligence Multisector ETF (NYSE: IRBO)
The iShares Robotics and Artificial Intelligence Multisector ETF aims to mirror the investment outcomes of the NYSE FactSet Global Robotics and Artificial Intelligence Index.
IRBO has had a strong performance in 2023, with a year-to-date gain of 25.67% (as of June 26, 2023).
Top holdings: Global Unichip Corp, HubSpot Inc.
5-Year ETF Performance Chart
Source: Google Finance
- Net assets: $338.09 million
- Average volume: 133,346
- P/E ratio (TTM): 21.39
- Net expense ratio: 0.47%
4. First Trust Nasdaq AI and Robotics ETF (NASDAQ: ROBT)
Managed by the United States based First Trust Advisors L.P. and serviced by Brown Brothers Harriman, this ETF tracks Nasdaq CTA Artificial Intelligence and Robotics Index.
The fund usually invests at least 90% of its assets in the common stocks and depositary receipts that make up the index.
Top holdings: Appian Corporation, Valeo S.A.
5-Year ETF Performance Chart
Source: Google Finance
- Net assets: $294 million
- Average volume: 95,811
- P/E ratio (TTM): 31.29
- Net expense ratio: 0.65%
5. ROBO Global Robotics and Automation Index ETF (NYSEARCA: ROBO)
The ROBO Global Robotics and Automation ETF has a diversified portfolio of Robotics, Automation, and AI (RAAI) stock offerings.
It has 78 holdings (as of June 2023) and is designed to minimize risk by prioritizing large-cap AI companies.
Top holdings: Symbotic Inc., Intuitive Surgical Inc
5-Year ETF Performance Chart
Source: Google Finance
- Net assets: $1.38 billion
- Average volume: 136,756
- P/E ratio (TTM): 30.19
- Net expense ratio: 0.95%
6. AI Powered Equity ETF (NYSE: AIEQ)
This actively managed ETF uses AI technology (powered by IBM Watson AI) to select each stock.
It invests in companies that focus primarily on AI and automation. As of June 2023, it has a YTD return of 10.64%.
Top holdings: Morgan Stanley, D.R. Horton Inc
5-Year ETF Performance Chart
Source: Google Finance
- Net assets: $107.4 million
- Average volume: 17,648
- P/E ratio (TTM): 8.60
- Net expense ratio: 0.75%
7. QRAFT AI-Pilot US Large Cap Dynamic Beta and Income ETF (NYSE: AIDB)
AIDB is an actively managed ETF that aims to provide long-term capital appreciation with reduced drawdowns.
It uses machine learning (ML) and AI technology (Qraft's AI Pilot) to adjust its equity exposure based on market risk.
Top holdings: iShares core S&P 500 ETF, iShares short treasury bond
5-Year ETF Performance Chart
Source: Google Finance
- Net assets: $498.6 thousand
- Average volume: 7,676
- P/E ratio (TTM): N/A
- Net expense ratio: N/A
8. Ark Autonomous Technology & Robotics ETF (BATS: ARKQ)
This actively managed ETF invests in global companies that stand to benefit from technological advancements in automation, energy, and manufacturing sectors.
ARK Invest, the firm that manages the fund, uses a proprietary research process to identify innovation-driven stock options.
Top holdings: Tesla Inc, UiPath Inc
5-Year ETF Performance Chart
Source: Google Finance
- Net assets: $934.66 million
- Average volume: 102,333
- P/E ratio (TTM): 30.11
- Net expense ratio: 0.75%
9. Roundhill Generative AI & Technology ETF (NYSE: CHAT)
CHAT ETF is an actively managed fund from Roundhill Investments that tracks the performance of companies in the Generative AI space.
It typically holds 25-50 stocks at any given time. This generative AI ETF uses a proprietary methodology to pick AI company stocks that derive at least 50% of their revenue from AI and tech-related industries.
Top holdings: Nvidia Corp, Microsoft Corp
5-Year ETF Performance Chart
Source: Google Finance
- Net assets: $21.93 million
- Average volume: 227,068
- P/E ratio (TTM): N/A
- Net expense ratio: 0.75%
10. iShares Exponential Technologies ETF (NASDAQ: XT)
The iShares fund invests in companies leveraging technologies that can potentially change how we live and work, including robotics, nanotechnology, and 3D printing.
The Fund tracks the Morningstar Exponential Technologies Index and has 196 holdings as of June 2023.
Top holdings: Nvidia Corp, Meta Platforms Inc Class A
5-Year ETF Performance Chart
Source: Google Finance
- Net assets: $3.23 billion
- Average volume: 118,498
- P/E ratio (TTM): 23.15
- Net expense ratio: 0.46%
11. Direxion Daily Robo AI & Automation Index Bull 2X Shares (NYSE: UBOT)
UBOT seeks to double the daily performance of the Indxx Global Robotics and Artificial Intelligence Thematic Index. So if the index goes up 1% in a day, the ETF will go up 2% — making it a good option if you seek short-term gains.
The Indxx Global Robotics and Artificial Intelligence Thematic Index focuses on robotics, AI, and automation companies.
Top holdings: Global X Robotics & Artfcl Intllgnc ETF, Dreyfus Government Cash Management
5-Year ETF Performance Chart
Source: Google Finance
- Net assets: $25.83 million
- Average volume: 40,243
- P/E ratio (TTM): 46.31
- Net expense ratio: 1.35%
12. SPDR S&P Kensho New Economies Composite ETF (NYSE: KOMP)
Listed on NYSE ARCA, the KOMP ETF aims to match the performance of the S&P Kensho New Economies Composite Index.
The index uses AI and quantitative methods to identify companies with exposure to emerging technologies like robotics, autonomous vehicles, clean energy, and quantum computing.
Top holdings: Teledyne Technologies Inc, PTC Inc
5-year performance chart
Source: Google Finance
- Net assets: $1.66 billion
- Average volume: 97,030
- P/E ratio (TTM): 20.90
- Net expense ratio: 0.20%
Note: Read the ETF prospectus to learn more about the fund and assess its past and current performance, market price, investment objective, risk, and other charges before investing. Visit the official page of the issuer to obtain the prospectus and summary prospectus.
Now that we’ve pinpointed the best AI ETFs, let's explore why investing in these funds can be a smart move.
3 Benefits of Investing in AI ETFs
Investing in AI ETFs comes with these benefits:
1. Fast-growing and Forward-looking Sector
The AI sector is among the fast-growing and most innovative sectors in the world.
Consider these statistics:
- According to Grand View Research, the global AI market is expected to grow at a compound annual growth rate (CAGR) of 37.3% from 2023 to 2030.
- Grand View Research also indicates that the United States AI market may reach $300 billion by 2026.
- The Insight Partners reports that worldwide AI chip revenue will surpass $80 billion in the next five years.
- 87% of global organizations believe that using artificial intelligence technology will give them a competitive edge.
- Generative AI platform ChatGPT hit 100 million users a mere two months after its launch in November 2022, becoming the fastest-growing application of all time.
Mind-bending numbers, right?
By investing in AI ETFs, you can get exposure to companies that are at the forefront of the AI revolution.
2. Potential for High Returns
With such impressive numbers in the artificial intelligence technology market, it’s clear that AI ETFs have the potential to generate high returns for investors.
Bloomberg states AI ETFs were big contributors in driving the S&P 500 gains in the first quarter of 2023.
One of the world’s largest AI ETFs — the Global X Robotics and Artificial Intelligence fund (BOTZ) — has returned an impressive 35.4% in 2023.
2. Portfolio diversification
AI ETFs can help diversify your portfolio, offering exposure to a variety of companies in the AI industry — from tech giants to smaller, innovative firms.
This can help mitigate risk by spreading investments across different players in the AI sector.
But that’s not to say that AI investment is entirely risk-free.
3 Downsides of Investing in AI ETFs
Before investing in AI ETFs, remember these factors:
- Prone to Volatility: The AI market is still in its infancy and subject to high levels of volatility. This means that AI ETFs can experience sharp swings in price, which can be risky for an investor.
- Lack of Regulation: The AI industry is not as heavily regulated as other sectors, such as healthcare or finance. This means you may be affected by future policy changes, impacting the stability and growth of your investments.
- Lack of Historical Data: An ETF’s past performance data can give you valuable insights into its future potential. Unfortunately, AI technology is relatively new, with insufficient historical data to qualify investment choices. So, you’ll mostly have to rely on speculation.
So, while AI ETFs sound exciting, is there any other realiable alternative investment worth exploring to balance out your portfolio?
Fine Wine Investment: Get Consistent Returns that Outpace the Stock Market
Investing in fine wine is a smart way to diversify your portfolio and hedge against inflation.
It’s a non-correlated asset class that has historically performed well during economic downturns. For instance, during the COVID-19 recession, the Dow Jones and S&P 500 fell by 22.7% and 19.6%, respectively, while fine wine only declined by 1.4%.
And unlike the volatility in traditional assets like stocks and gold, fine wine has shown a track record of stable, long-term growth.
And the numbers speak for themselves:
- The 2022 Knight Frank Wealth Report ranks fine wine as the top-performing passion asset in 2021, recording an impressive 16% growth.
- On the Cult Wines Global Index, fine wine ended 2022 with a 20.54% annual return, outperforming both traditional financial assets and alternative assets like gold.
When it comes to wine auctions, you’ll come across mind-boggling numbers:
- A 1787 Chateau Lafite, believed to have been owned by Thomas Jefferson, sold for a staggering $160,000 in 1985.
- A 6-litre bottle of the 2019 Glass Slipper Vineyard Cabernet Sauvignon sold for a record-breaking $1 million at a 2021 auction in New Orleans.
So how do you go about investing in fine wines?
Simple!
Through a trusted wine investing platform like Vinovest.
Diversify Your Portfolio by Investing in the Finest Wines Through Vinovest
Vinovest is a fintech platform that helps you buy, store, and sell exceptional wines from around the world.
They leverage a global network of top wineries and trusted fine wine vintners to give you a portfolio of the best investment-grade wine bottles.
Here’s how you can get started:
- Sign up on the Vinovest website.
- Fill out a short questionnaire. Your answers here will help Vinovest build a personalized portfolio catered to your investment strategy.
- Fund your account with a minimum of $1,000.
- The Vinovest team will recommend wines tailored to your preferred investment style.
- Sit back and enjoy a glass of your favorite vino while your portfolio grows.
And what are the benefits?
Vinovest stores your wines in climate-controlled bonded warehouses that don’t charge excise duty or VAT. They will even ship your wine to your doorstep in case you want to uncork the bottle. The best part is that you get 100% ownership of your wines.
Visit the Vinovest website and start investing today!
