Artificial Intelligence (AI) has emerged as a promising and transformative technology. Holding significant potential for shaping the 21st century. As AI continues to gain momentum, investors are increasingly looking for opportunities to capitalize on its potential. Exchange-traded funds (ETFs) provide a convenient and diversified way to invest in AI. Offering exposure to a basket of AI-related companies.
In the face of challenges encountered by the AI industry in 2024. Several ETFs have showcased remarkable resilience and the potential to generate robust returns. The performance of the AI sector, as measured by the Nasdaq CTA Artificial Intelligence and Robotics Index, As of Feb. 9, the industry benchmark, represented by Nasdaq CTA Artificial Intelligence and Robotics Index, had seen a decline of 16% compared to a 9% drop in the S&P 500 Index over the past year.
Let’s explore the Best 6 Artificial Intelligence (AI) ETFs in 2024, considering their performance and other relevant factors. Investors can seize the opportunity to partake in the flourishing AI industry while effectively managing risk through diversified portfolios offered by these ETFs.
Table of Contents
-
The Top 6 Artificial Intelligence (AI) ETFs to look out for in 2024
- Global X Robotics & Artificial Intelligence ETF (BOTZ)
- ARK Autonomous Technology & Robotics ETF (ARKQ)
- iShares Robotics and Artificial Intelligence ETF (IRBO)
- First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)
- Innovator Deepwater Frontier Tech ETF (LOUP)
- VanEck Vectors Artificial Intelligence and Big Data ETF (BBIG)
- Top Alternative to Artificial Intelligence ETFs – HALO Artificial Intelligence Thematic Share Portfolio
- Conclusion
The Top 6 Artificial Intelligence (AI) ETFs to look out for in 2024
Investing in AI ETFs allows investors to tap into this growth potential. As AI continues to advance and permeate various industries. Companies at the forefront of AI development are likely to benefit, potentially leading to higher returns for investors. The following are the top artificial intelligence (AI) EFTs for investors looking for high returns in 2024 should on a look for:
Global X Robotics & Artificial Intelligence ETF (BOTZ)
The Global X Robotics & Artificial Intelligence ETF (BOTZ) was established in 2016 to focus on AI and robotics technology companies. It tracks the Indxx Global Robotics & Artificial Intelligence Thematic Index, which comprises leading companies driving the AI revolution globally.
The ETF’s portfolio includes companies from various sectors like industrial automation, healthcare technology, and autonomous vehicles. Top holdings feature key AI players such as NVIDIA, Intuitive Surgical, and iRobot. BOTZ offers investors a chance to capitalize on the growth potential of AI through its diversified approach and exposure to leading companies. Geographically, approximately 45% of its holdings are in the U.S., followed by a third in Japan and 11% in Switzerland, with the remainder scattered across seven other countries.
Intuitive Surgical accounts for 10% of assets, while Nvidia, ABB, and Keyence each hold 9% and 8%, respectively. BOTZ offers a modest dividend yield of 0.94%, making it more suitable for investors seeking growth-oriented opportunities.
ARK Autonomous Technology & Robotics ETF (ARKQ)
The ARK Autonomous Technology & Robotics ETF (ARKQ) is an ETF managed by ARK Investment Management that provides exposure to companies involved in AI, robotics, automation, and autonomous vehicles across various sectors. Launched in September 2014, ARKQ is known for its active and innovative investment strategies.
The ARKQ’s portfolio allocation heavily focuses on technology investments, comprising approximately 38.89% of its holdings. Communication Services and Healthcare make up 10.14% and 1.98%, respectively. Industrials account for about 30.90%, while Consumer Cyclical makes up around 17.69%.
ARKQ’s investment thesis revolves around the belief that autonomous technology and robotics will disrupt traditional industries and create new opportunities. Its portfolio includes prominent companies like Tesla, Alphabet, and JD.com, known for their advancements in AI and robotics. ARKQ offers investors a high-conviction approach, aiming to capture the long-term growth potential of disruptive technologies.
iShares Robotics and Artificial Intelligence ETF (IRBO)
The iShares Robotics and Artificial Intelligence ETF (IRBO) tracks the NYSE FactSet Global Robotics and Artificial Intelligence Index, aiming to provide investors with exposure to the dynamic AI industry and its growth potential. Formed in 2018, IRBO currently manages less than $1 billion in assets, offering a well-diversified portfolio with 133 company holdings. Many of its top holdings provide exposure to fast-growing small-cap companies, enhancing its appeal.
IRBO focuses on companies involved in the production and utilization of AI, robotics, and automation-related products and services. Its portfolio spans various sectors, including industrial automation, healthcare technology, and electronic manufacturing. Prominent holdings include ABB Ltd, Siemens, and Yaskawa Electric. With a global perspective and broad industry exposure, IRBO presents investors with a diversified approach to capitalizing on the AI and robotics sector’s rapid evolution.
The ETF maintains a competitive expense ratio of 0.47%. Given its higher exposure to cloud stocks and chipmakers than pure AI companies, IRBO’s performance is likely to be influenced by the overall performance of the cloud stocks market.
First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)
The First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT) is an ETF with a primary focus on technology, specifically encompassing companies involved in artificial intelligence and robotics. ROBT is a diverse ETF that spans various sectors, such as technology, industrials, and more. The primary objective is to provide returns that are consistent with the price and yield performance of the Nasdaq CTA Artificial Intelligence and Robotics Index.
With a notable emphasis on artificial intelligence, ROBT assigns approximately 60% of its assets to the technology sector, along with 11% to consumer discretionary stocks and 2% to communication services. Industrials receive a significant share of 21%, while the remaining portion is spread across healthcare, real estate, and consumer staples stocks.
ROBT’s portfolio includes renowned companies from different sectors, such as Amazon, Microsoft, and Intel, emphasizing AI and machine learning. This ETF allows investors to participate in the growth potential of these transformative technologies.
Innovator Deepwater Frontier Tech ETF (LOUP)
The Innovator Deepwater Frontier Tech ETF (LOUP) is an actively managed fund that aims to provide exposure to frontier technologies, artificial intelligence (AI), autonomous and electric vehicles, robotics, fintech, and virtual reality/augmented reality. The fund’s strategy is to invest in companies that are developing or utilizing technologies with the potential to disrupt traditional industries.
The LOUP ETF, which was launched in July 2018, consists of 30 holdings. As of May 30, 68.32% of the holdings are in the information technology sector, 17.82% in industrials, 5.93% in consumer discretionary, 5.23% in financials, and 2.71% in communication services. In terms of geographic distribution, US companies comprise 67.39% of the fund’s holdings, followed by the Netherlands at 7.95%, Brazil at 5.23%, and South Korea at 4.71%.
The Innovator Deepwater Frontier Tech ETF’s portfolio includes companies involved in various sectors, such as clean energy, biotechnology, and artificial intelligence. The fund aims to identify companies to become leaders in their respective fields and benefit from the growth of frontier technologies.
VanEck Vectors Artificial Intelligence and Big Data ETF (BBIG)
The VanEck Vectors Artificial Intelligence and Big Data ETF (BBIG) seeks to track the performance of the index that includes companies involved in AI, machine learning, big data, and cloud computing. Companies that are using big data and artificial intelligence to make important decisions can be found through BBIG.
Furthermore, the company was established on July 18, 2017, and in February 2022, it acquired AdRizer, a notable provider of technology solutions. AdRizer specializes in automating artificial intelligence utilization for digital advertising analytics and programmatic media buying.
This acquisition empowers publishers and agencies by enabling them to efficiently place digital ads in real-time while effectively managing their ad investment with a risk-averse approach. BBIG’s portfolio comprises companies from various sectors, including technology, healthcare, and financial services. Major holdings include Alphabet, Amazon, and Facebook.
Top Alternative to Artificial Intelligence ETFs – HALO Artificial Intelligence Thematic Share Portfolio
If you are looking for a more concentrated alternative to Artificial Intelligence ETFs, you should consider the Artificial Intelligence Portfolio from HALO Technologies.
Launched in 2018, Artificial Intelligence is a ready-to-invest thematic share portfolio constructed of the top 10 companies leading the AI revolution hand-selected by HALO’s expert research team.
The portfolio is designed to outperform the market by investing in businesses innovating at the forefront of AI technologies, revolutionizing industries, and reshaping the future of society. Within the portfolio, there is a global focus, providing investors with the benefit from AI’s international growth potential while mitigating regional or localized risks. The investment strategy for the Artificial Intelligence Portfolio centers on capitalizing on the expanding AI sector’s potential to generate long-term growth.
The Artificial Intelligence Portfolio is unique to HALO and can be accessed by opening a free HALO Trading account. HALO Trading also gives you access to HALO’s other thematic share portfolios and allows you to analyze and invest in over 35,000 shares and ETFs across 30 global exchanges.
Conclusion
The potential for rapid expansion of the AI industry offers investors a chance to profit from exchange-traded fund (ETF) investments. Despite a 16% drop in the AI industry benchmark, several AI ETFs have demonstrated resilience and strong returns.
The top six AI ETFs mentioned above offer diversified exposure to AI-related companies, with a focus on technology, industrials, healthcare, and other sectors. These ETFs offer a diversified approach to investing in the AI sector, allowing investors to access a basket of companies at the forefront of technological innovation.
As AI continues to shape various industries, investing in these ETFs can provide long-term growth opportunities for investors.
