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5 Artificial Intelligence ETFs (Updated 2023)
Feb. 01, 2023 01:30PM PST
Artificial Intelligence Investing
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The artificial intelligence sector is expected to be worth over US$407 billion by 2027. Here are five artificial intelligence ETFs for investors who want broad exposure to this developing industry.
It might be surprising, but the phrase "artificial intelligence" has been around for over half a century — since 1955, in fact. It was intended to describe a new computer science subdiscipline. But what exactly is artificial intelligence?
In simple terms, artificial intelligence, or AI, means "simulated intelligence in machines." In other words, machines with AI are capable of simulating thinking like people and mimicking their actions. The ideal characteristic of AI is the ability to rationalize.
Of course, that is a very broad definition of AI technology. There are actually at least 14 different applications of AI, which seems to prove that this market isn't going away anytime soon.
Case in point: Research conducted by Markets and Markets suggests the AI industry will be worth over US$407 billion by 2027, increasing at a compound annual growth rate of 36.2 percent between 2022 and 2027. With that much money going into the sector, there is certainly no shortage of ways for investors to add AI investments to their portfolios.
For those who are new to this segment of the technology arena and would prefer to gain exposure to the overall market rather than specific AI stocks, exchange-traded funds (ETFs) are a popular avenue. Here the Investing News Network looks at five AI-focused ETFs listed on ETFdb.com. All details were current as of January 26, 2023.
According to ETFdb.com, these AI ETFs are required to meet one of three criteria:
- Focus on stocks developing new products, services or technological improvements in AI-related research
- Have 25 percent portfolio exposure to companies that spend money on AI research and development expenses
- Choose individual securities to be included in the fund based on their use of AI methods
1. SPDR S&P Kensho New Economies Composite ETF (ARCA:KOMP)
Assets under management (AUM): US$1.71 billion
The SPDR S&P Kensho New Economies Composite ETF looks to companies advancing “new economy” technologies. The index underlying the fund is a composite of various Kensho new economies sub-indexes. The ETF offers exposure to firms involved in vehicle automation, robotics, 3D printing, nanotechnology, exponential processing power and AI.
The SPDR S&P Kensho New Economies Composite ETF was launched in October 2018 and currently tracks 561 holdings, including Teledyne Technologies (NYSE:TDY) and Bruker (NASDAQ:BRKR).
2. Global X Robotics & Artificial Intelligence Thematic ETF (NASDAQ:BOTZ)
AUM: US$1.44 billion
The Global X Robotics & Artificial Intelligence Thematic ETF offers exposure to firms involved in the global automation and robotics industries. According to ETF.com, the Global X Robotics & Artificial Intelligence Thematic ETF was launched in September 2016 and has holdings in various markets, including technology, healthcare and energy. Eligible companies must earn a significant portion of their revenue from or have a stated business purpose in the fields of robotics or AI.
The ETF currently tracks 44 holdings, including Intuitive Surgical (NASDAQ:ISRG) and NVIDIA (NASDAQ:NVDA).
3. Robo Global Robotics and Automation Index ETF (ARCA:ROBO)
AUM: US$1.262 billion
The Robo Global Robotics and Automation Index ETF, launched in October 2013, was the first robotics and automation ETF to market. As its name suggests, it follows companies involved in those sectors. Robo Global currently tracks 82 companies, and its top two holdings are IPG Photonics (NASDAQ:IPGP) and Zebra Technologies (NASDAQ:ZBRA).
4. ARK Autonomous Technology & Robotics ETF (ARCA:ARKQ)
AUM: US$888 million
The ARK Autonomous Technology & Robotics ETF was created in September 2014 and primarily focuses on advancements that enhance productivity and reduces costs in autonomous vehicles, robotics, 3D printing and energy storage technology.
The fund includes companies that may "benefit from the development of new products or services, technological improvements and advancements in scientific research related to, among other things, energy, automation and manufacturing, materials and transportation." This ETF tracks 39 holdings, with its two biggest being Tesla (NASDAQ:TSLA) and Trimble (NASDAQ:TRMB).
5. iShares Robotics and Artificial Intelligence ETF (ARCA:IRBO)
AUM: US$251 million
The last AI ETF on this list is the iShares Robotics and Artificial Intelligence ETF, which is relatively new compared to the others — the fund launched in June 2018. It tracks an index composed of 114 developed and emerging market companies that could benefit from long-term growth in robotics technology and AI. The fund has the lowest expense ratio of the AI funds on this list at 0.47 percent.
Some of the ETF's top holdings include Meitu (OTC Pink:MEIUF,HKEX:1357) and iQIYI (NASDAQ:IQ).
This is an updated version of an article originally published by the Investing News Network in 2017.
Don't forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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