Artificial intelligence (AI) is a rapidly expanding sector, projected to surge from $279.2 billion in 2024 to $3.5 trillion within eight years, marking a compound annual growth rate of 31.5%. For investors eager to capitalize on this growth, AI-focused exchange-traded funds (ETFs) offer a strategic option by providing diversification and solid returns. There are three main types of AI ETFs to consider: AI-themed ETFs, broader tech ETFs with AI exposure, and AI-run ETFs.
AI-themed ETFs concentrate on companies directly involved in AI development and usage. The ROBO Global Artificial Intelligence ETF is a notable example, balancing its portfolio across 52 stocks in sectors like computing and e-commerce.
For those seeking a hedge against potential market bubbles, broader tech ETFs like the Vanguard Information Technology ETF offer significant AI exposure while maintaining a diversified tech stock portfolio. This fund features major tech companies such as Nvidia and Apple.
Lastly, AI-run ETFs, such as the AI Powered Equity ETF, leverage artificial intelligence to select stocks, using data from various sources to build a diversified portfolio with significant holdings in information technology.
Investing in AI ETFs allows investors to engage with the burgeoning AI sector while managing risks, making them a compelling choice for those looking to navigate this evolving market.
