The artificial intelligence (AI) sector is expected to be worth $16 billion by 2022. Here, INN looks at 4 AI ETFs for investors to consider.
It might be surprising, but the phrase “artificial intelligence” has been around for over a half a century–since 1955, in fact–and was intended to describe a new computer science-sub discipline.
But, what exactly is artificial intelligence (AI)? In simple terms, as defined by Investorpedia, AI means “stimulated intelligence in machines.” In other words, AI machines are capable of thinking like people and mimicking their actions–sort of like a robot. Of course, that is a very broad definition of the capabilities AI encompasses. In fact, there are at least 10 different types of artificial intelligence, which only proves that this market isn’t going anywhere anytime soon.
Case in point, research conducted by Markets and Markets suggests the AI industry will be worth over $16 billion by 2022, increasing at a compound annual growth rate of 62.9 percent between 2016 and 2022. With that much money going into the sector, there is certainly no shortage of ways for investors to get their feet wet and add AI investment options to their portfolio.
For those who are new to investing and would rather invest in a market rather than a specific company, ETFs are a popular way to do so. As such, here the Investing News Network (INN) looks at the 4 solely artificial intelligence ETFs listed on ETFdb.com. The list is current as of March 12, 2018.
According to ETFdb, the AI ETFs are required to meet one of three criteria, namely:
- involvement in developing new products, services, technological improvements in scientific research related to AI;
- funds that have a 25 percent portfolio exposure to companies that spend money on AI research and development expenses;
- they use AI methods to choose individual securities to be included in the fund.
Read on the learn more about these artificial intelligence ETFs.
Sprott BUZZ Social Media Insights (NYSEARCA:BUZ)
First on our artificial intelligence ETF list is Buzz US Sentiment Leaders, which is relatively new: the fund came into effect on April 18 2016 and tracks the BUZZ NextGen AI US Sentiment Leaders Index, which follows the 76 most-discussed holdings through news articles, blogs, and social media sources, all with a minimum market cap requirement of $5 billion.
To that end, some of the fund’s top holdings include Micron Technology (NASDAQ:MU), Square (NYSE:SQ), Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), and NVIDIA (NASDAQ:NVDA).
Global X Robotics & Artificial Intelligence Thematic (NASDAQ:BOTZ)
The next fund on our artificial intelligence ETFs list is Global X Robotics & Artificial Intelligence Thematic ETF, which launched on September 12, 2016 and offers exposure to firms involved in the global automation and robotics industries.
According to Investing.com, the Global X Robotics ETF has $576 million invested in 85 stocks in markets such as hardware, software, and management of automated products and services. As the publication states, it can include autonomous cars, 3D printers, navigational systems, and medical devices, for example.
That being said, the ETF currently tracks 29 holdings, with its biggest one being NVIDIA, followed by Intuitive Surgical (NASDAQ:ISRG).
ARK Industrial Innovation ETF (NYSEARCA:ARKQ)
The Industrial Innovation ETF came into effect on September 30, 2014, and primarily focuses on advancements in autonomous vehicles, robotics, 3D printing, and energy storage technology that enhances productivity and reduces costs.
As of March 31, 2017, the fund describes itself as 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.”
According to its website, by 2035 over $12 trillion will be invested in automation and robotics.
Robo Global Robotics and Automation Index (NASDAQ:ROBO)
Last but not least on our artificial intelligence ETFs list is Robo Global Robotics and Automation Index, whose inception date is October 22, 2013.
As its name suggests, the fund tracks companies involved in robotics and automation, and currently tracks 88 companies, whose top two holdings include: Keyence (TYO:6861) and Mazor Robotics (NASDAQ:MZOR).
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This is an update to the article originally published in 2017.
Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.