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3 AI-Focused ETFs for Passive Investment Strategies



AI is projected to have significant growth over the next 7 years, providing a valuable opportunity for passive investors. There are several top ETFs that offer exposure to AI without the added risk. These ETFs include The Roundhill Generative AI & Technology ETF NYSEARCA: CHAT, The Wisdom Tree Artificial Intelligence & Innovation ETF BATS: WTAI, and The Global X Artificial Intelligence & Technology ETF NASDAQ: AIQ. All three provide a broad exposure to the AI market, with a focus on both established blue-chip companies and smaller-cap names that are driving innovation in the industry. 
What is the AI opportunity? AI is expected to be a $100 billion market by 2023, growing at a nearly 50% compound annual growth rate over the next decade. By 2030, AI is forecasted to grow 20 times its current size, fueled by advancements in technology, infrastructure, and services. Services are anticipated to be the largest and fastest-growing segment within the AI industry, making blue-chip tech companies particularly well-positioned for long-term gains. 
Some notable companies in the AI industry include NVIDIA NASDAQ: NVDA, Oracle NASDAQ: ORCL, and Adobe NASDAQ: ADBE. These companies have proven to be crucial players in the AI market. Oracle, for example, provides fundamental IT infrastructure and data handling services, while Adobe offers a user-friendly interface and data-generating creative tools. NVIDIA, known for its chip technology, is considered the leading AI stock and is expected to maintain its position as a pure-play AI stock for the foreseeable future. Their AI platform provides tools and infrastructure for developers and applications at all levels. 
Roundhill Generative AI & Technology ETF: Focus on Blue-Chip Exposure 
All major AI ETFs include some of the same companies in their portfolios, but the weighting and focus vary. The Roundhill Generative AI & Technology ETF primarily focuses on blue-chip companies and has limited exposure to small-cap and startup companies. However, it is the smallest fund on this list, with less than $100 million in assets under management. While the fund does not pay a dividend like some others, its holdings help to mitigate this. The top holdings of this ETF include NVIDIA, Microsoft (NASDAQ: MSFT), and Alphabet NASDAQ: GOOG, which are considered to be well-positioned across all AI segments in the long run. Other significant holdings include Baidu NASDAQ: BIDU, Adobe, Marvell Technology NASDAQ: MRVL, Meta NASDAQ: META, and Advanced Micro Devices NASDAQ: AMD, representing some of the top AI players in the industry. 
One risk with CHAT is its relatively short time in the market. Although it is deemed the best-positioned AI ETF, it has only been traded for a few months. If it fails to gain traction in the passive investment market, it could potentially lose value and cease to exist. 

Wisdom Tree Artificial Intelligence & Innovation Fund: Deeper AI Exposure 
The Wisdom Tree Artificial Intelligence & Innovation Fund is a larger and more established ETF with a track record of almost 2 years. Currently, the fund manages approximately $145 million in assets and includes top holdings such as NVIDIA and Meta Platforms. The other three companies in the top holdings are Alchip, a fabless semiconductor company specializing in ASIC and SoC designs, IonQ NYSE: IONQ, a quantum computing company, and Synopsys NASDAQ: SNPS, a design automation firm serving the semiconductor industry. Unlike CHAT, AIQ pays a small dividend, which helps offset any fees associated with the fund. 

Global X Artificial Intelligence & Technology ETF: Early-Stage Investment 

In the Global X Artificial Intelligence & Technology ETF, the top 10 holdings consist of companies like Alphabet, Amazon, Meta, Adobe, Intel, Oracle, and NVIDIA. These holdings represent AI technology, infrastructure, and services, with a focus on long-term integration of AI into everyday life. 
Before considering the WisdomTree Artificial Intelligence and Innovation Fund, it’s important to note that MarketBeat keeps track of Wall Street’s top-rated and best-performing research analysts and the stocks they recommend to their clients on a daily basis. According to MarketBeat, the five stocks that top analysts are currently recommending are not included in the WisdomTree Artificial Intelligence and Innovation Fund. While the fund currently has a “hold” rating among analysts, top-rated analysts believe there are better investment options available. For more information on these stocks, you can view them here. If you’re interested in investing in companies like SpaceX, StarLink, or The Boring Company, you can click here to learn when Elon Musk plans to let these companies IPO. Get This Free Report

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