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Artificial Intelligence Investing
5 Biggest Artificial Intelligence ETFs in 2024
Jun. 13, 2024 01:30PM PST
The artificial intelligence sector is expected to be worth over US$1.34 trillion by 2030. These five AI ETFs offer investors broad exposure to this developing industry.
whiteMocca / Shutterstock
The rise of generative AI in our daily lives has also led to a significant rise in interest in artificial intelligence and investing in AI.
While it seems like AI has exploded onto the scene in recent years, the phrase "artificial intelligence" has been around since 1955, when it was used to describe a new computer science subdiscipline.
Today, we use artificial intelligence, or AI, to mean 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.
Today, the applications for AI are rapidly expanding, which seems to prove that this market isn't going away anytime soon.
Research conducted by
Markets and Markets suggests the AI industry will be worth over US$1.34 trillion by 2030, increasing at a compound annual growth rate of 35.7 percent between 2024 and 2030. 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 looking to invest in artificial intelligence who would prefer to gain exposure to AI through 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 ETFs to invest in, based on the largest listed on ETFdb.com. All details were current as of June 10, 2024.
According to ETFdb.com, these artificial intelligence 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. Global X Robotics & Artificial Intelligence Thematic ETF (NASDAQ:BOTZ)
AUM: US$2.77 billion
First up on this AI ETF list is 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). The fund has an expense ratio of 0.68 percent.
2. Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ)
AUM: US$1.906 billion
Established in May 2018, the Global X Artificial Intelligence & Technology ETF tracks the performance of tracks the performance of the Indxx Artificial Intelligence & Big Data Index. "AIQ is passively managed to invest in developed market companies that are involved in the use of artificial intelligence to analyze big data, whether for their own operations, as a service to other companies, or through the production of related hardware," according to ETF.com.
AIQ's 85 holdings include QUALCOMM (NASDAQ:QCOM) and Google (NASDAQ:GOOGL). It also has an expense ratio of 0.68 percent.
3. iShares Robotics and Artificial Intelligence ETF (ARCA:IRBO)
AUM: US$672 million
The iShares Robotics and Artificial Intelligence ETF launched in June 2018. It tracks an index composed of 110 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 five AI funds on this list at 0.47 percent.
Some of the ETF's top holdings include MicroStrategy (NASDAQ:MSTR) and ARM Holdings (NASDAQ:ARM).
4. First Trust NASDAQ Artificial Intelligence and Robotics ETF (NASDAQ:ROBT)
AUM: US$532 million
The First Trust NASDAQ Artificial Intelligence and Robotics ETF was launched in February 2018. It follows a modified equal-weighted index of all-cap, global companies involved in AI or robotics.
ROBT currently tracks 109 companies, and two of its top holdings are AeroEnvironment (NASDAQ:AVAV) and QinetiQ Group (LSE:QQ). The fund has an expense ratio of 0.65 percent.
5. ROBO Global Artificial Intelligence ETF (ARCA:THNQ)
AUM: US$136 million
The last AI ETF on this list is ROBO Global Artificial Intelligence ETF is relatively new compared to the others — the fund launched in May 2020. The fund has an expense ratio of 0.68 percent.
It is designed The index is designed to track the performance of companies with a significant portion of their revenue derived from the business of artificial intelligence. THNQ's 60 holdings include Microsoft (NASDAQ:QCOM) and Darktrace (LSE:DARK).
This is an updated version of an article originally published by the Investing News Network in 2017.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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Melissa Pistilli has been reporting on the markets and educating investors since 2006. She has covered a wide variety of industries in the investment space including mining, cannabis, tech and pharmaceuticals. She helps to educate investors about opportunities in a variety of growth markets. Melissa holds a bachelor's degree in English education as well as a master's degree in the teaching of writing, both from Humboldt State University, California.
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Melissa Pistilli has been reporting on the markets and educating investors since 2006. She has covered a wide variety of industries in the investment space including mining, cannabis, tech and pharmaceuticals. She helps to educate investors about opportunities in a variety of growth markets. Melissa holds a bachelor's degree in English education as well as a master's degree in the teaching of writing, both from Humboldt State University, California.
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