What is the best ETF for AI?

Global X Artificial Intelligence and Technology ETF is the top performer on the GOBankingRates list and could be the cream of the crop. In addition to producing stellar returns, the fund invests in blue chip stocks , including tried-and-true companies like Adobe and IBM.

Does Vanguard have any AI funds?

No. The Vanguard Information Technology ETF invests in some of the same companies AI funds invest in, including Apple, Microsoft and Nvidia. However, it's not specifically an AI fund.

Is there an index for AI stocks?

Yes. The Nasdaq CTA Artificial Intelligence and Robotics Index tracks the performance of AI and robotics companies in the technology , industrial, medical and other sectors.

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Best Artificial Intelligence ETFs To Invest In October 2024

October 9, 2024

8 min Read

Written by John Csiszar

Edited by Susan Kim

Vertigo3d / Getty Images

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Artificial intelligence, or AI, is everywhere. While this technology has long been used in many of the electronics we use daily, the current generation of AI tools has brought machine learning to a whole new level. And wherever innovation lies, can the stock market be far behind?

Best AI ETFs To Invest In for 2024

Investing in individual stocks in such a nascent industry can be risky. A good option for capitalizing on the popularity of AI is to invest in exchange-traded funds, or ETFs, which give you roughly the same performance as the sector (or some part of it) as a whole. Here are some of the most promising artificial intelligence ETFs to invest in for long-term growth in 2024, chosen based on a combination of size, performance, expenses and exposure to various subsectors of the AI market:

AI ETF	Expense Ratio	Assets Under Management
Global X Artificial Intelligence and Technology ETF (AIQ)	0.68%	$2.26 billion
Global X Robotics and Artificial Intelligence ETF (BOTZ)	0.68%	$2.60 billion
Robo Global Artificial Intelligence ETF (THNQ)	0.68%	$136.03 million
Robo Global Robotics and Automation Index ETF (ROBO)	0.95%	$1.13 billion
iShares Future AI & Tech ETF	0.47%	$608.68 million
First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)	0.65%	$445.14 million
iShares Exponential Technologies ETF (XT)	0.46%	$3.52 billion
Ark Autonomous Technology and Robotics ETF (ARKQ)	0.75%	$739.2 million

1. Global X Artificial Intelligence and Technology ETF (AIQ)

Total number of companies: 91
Assets under management: $2.26 billion
Expense ratio: 0.68%
Top five holdings: Alibaba, Tencent Holdings, IBM, Meta, ServiceNow

Global X Artificial Intelligence and Technology ETF has returned 20.46% year to date, closing at $37.56 on Oct. 4. This fund is heavily weighted in technology, as the name suggests, but also holds communications services and consumer cyclical stocks. The top positions by market value are Alibaba (BABA), Tencent Holdings (700 HK), IBM (IBM), Meta (META) and ServiceNow (NOW).

2. Global X Robotics and Artificial Intelligence ETF (BOTZ)

Total number of companies: 46
Assets under management: $2.60 billion
Expense ratio: 0.68%
Top five holdings: Nvidia, Intuitive Surgical, ABB, Keyence, SMC Corp.

Global X Robotics and Artificial Intelligence ETF closed at $32.07 per share on Oct. 4, up 12.53% since the beginning of the year. This ETF’s top holdings by market value are Nvidia (NVDA), Intuitive Surgical (ISRG), ABB (ABBN SW), Keyence (6861 JP) and SMC (6273 JP).

3. Robo Global Artificial Intelligence ETF (THNQ)

Total number of companies: 55
Assets under management: $136.03 million
Expense ratio: 0.68%
Top five holdings: JD.com Inc., Alibaba, Nvidia, Advanced Micro Devices, Ambarella Inc.

Robo Global Artificial Intelligence ETF is up 13.04% so far this year and closed at $46.62 on Oct. 4. This is an index fund that tracks the performance of publicly traded companies that derive much of their revenue from the artificial intelligence field. Its top holdings are JD.com Inc. (JD), Alibaba (BABA), Nvidia (NVDA, Advanced Micro Devices (AMD) and Ambarella Inc. (AMBA).

4. Robo Global Robotics and Automation Index ETF (ROBO)

Total number of companies: 78
Assets under management: $1.13 billion
Expense ratio: 0.95%
Top five holdings: Symbiotic Inc., Harmonic Drive Systems Inc., IPG Photonics Corp., Fanuc Corp., Novanta

Robo Global Robotics and Automation Index ETF closed at $56.91 on Oct. 4 and is down 0.68% year to date. Its top 10 holdings represent less than 20% of its total assets, and no position makes up more than 1.78% of the fund.

5. iShares Future AI & Tech ETF (ARTY)

Total number of companies: 47
Assets under management: $608.68 million
Expense ratio: 0.47%
Top five holdings: Advanced Micro Devices, Broadcom, Nvidia, Super Microcomputer, Meta Platforms

Formerly known as the iShares Robotics and Artificial Intelligence Multisector ETF, which traded under the IRBO ticker, the iShares Future AI & Tech ETF (ARTY) holds positions primarily in information technology (90.54%) and communications (6.52%), and it also has a 2.79% weighting in consumer discretionary. ARTY closed at $34.51 per share on Oct. 4 and is up 0.03% year to date.

6. First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)

Total number of companies: 107
Assets under management: $445.14 million
Expense ratio: 0.65%
Top five holdings: Palantir Technologies, Symbiotic Inc., Ocado Group, Meta Platforms, PKSHA Technology

One of the purest AI ETFs, First Trust Nasdaq Artificial Intelligence and Robotics ETF invests at least 90% of net assets in companies that are in the Nasdaq CTA Artificial Intelligence and Robotics Index. ROBT is down 3.84% year to date and closed at $43.78 on Oct. 4. The information technology sector makes up over half (52.77%) of the investments in this fund.

7. iShares Exponential Technologies ETF (XT)

Total number of companies: 190
Assets under management: $3.52 billion
Expense ratio: 0.46%
Top five holdings: Nvidia, Palantir Technologies, WiseTech Global, Broadcom, Guidewire Software

IShares Exponential Technologies ETF holds mostly information technology stocks (57.82% of total holdings), although it also has an allocation of 16.26% in healthcare stocks. The fund closed at $60.84 on Oct. 4 and is up 1.62% year to date.

8. Ark Autonomous Technology and Robotics ETF (ARKQ)

Total number of companies: 30-50
Assets under management: $739.2 million
Expense ratio: 0.75%
Top five holdings: Tesla, Kratos, Teradyne, Iridium, Rocket Lab USA

Ark Autonomous Technology and Robotics ETF invests in autonomous technology and robotics companies that are disruptive innovators. It closed at $61.64 on Oct. 4 and is up 6.83% year to date.

ETFs That Actually Use AI

If you are really all in on AI, you might want to invest in an ETF that is managed by AI. While the jury is still out on whether AI can pick better stocks than an experienced fund manager, here are some funds that use AI to at least partially create their investing models.

VanEck Social Sentiment ETF (BUZZ)

VanEck Social Sentiment ETF uses AI to help pick the large-cap stocks in the portfolio. The fund has returned 15.14% year to date and closed at $21.520 on Oct. 4. It’s heavy in technology but not as much as some of the AI-focused ETFs, with 35.08% of its positions in the information technology sector. Top holdings include MicroStrategy (MSTR), Intel (INTC), Palantir Technologies (PLTR), Meta and Advanced Micro Devices (AMD).

Qraft AI-Enhanced US Large Cap Momentum ETF (AMOM)

Qraft AI-Enhanced U.S. Large Cap Momentum ETF identifies the best momentum stocks using artificial intelligence. It closed at $43.25 on Oct. 4 and is up 29.99% so far this year. It holds positions in Nvidia (NVDA), Apple (AAPL), Eli Lilly (LLY), Tesla (TSLA) and Broadcom (AVGO).

Amplify AI Powered Equity ETF (AIEQ)

Amplify AI Powered Equity ETF uses EquBot, a quantitative model that runs on the IBM Watson platform to inform its holding decisions. It is up 4.63% year to date, and it closed at $37.25 on Oct. 4. Top holdings include Alphabet (GOOGL), Progressive (PGR) Phillip Morris (PM), Adobe (ADBE) and Coinbase (COIN).

Different Types of AI ETFs

Although many different ETFs are categorized together under the broad AI banner, this doesn’t mean that they’re all the same. Some AI ETFs focus on artificial intelligence software applications while others buy robotics businesses, communication services or even financial or consumer cyclical companies. It’s important to understand which type of investment you’re buying when you pick an AI ETF, as you might be unpleasantly surprised with what you get if you buy an ETF simply because it has “AI” in its name.

How To Buy AI ETFs

You can buy AI ETFs at any brokerage, just like a stock. Simply pick a broker, enter your trade and receive your shares. Most brokers these days offer zero-commission trading for both stocks and ETFs, so buying and/or selling your AI ETF shouldn’t be cost-prohibitive.

Alternative Ways To Invest In AI

If you’re really looking to hit it big in the AI world, investing directly in AI stocks might be a good option for you. Although AI ETFs provide broad exposure to the industry, picking a few individual stocks is a way to get more direct exposure. Whereas some AI stocks in an ETF may end up being duds, dragging down overall returns, picking a few individual winners could provide a big boost to your portfolio’s value.

Although there are plenty of speculative stocks in the AI world, some of the biggest companies on the planet are also leveraged to AI, including Microsoft, Alphabet, Amazon and Nvidia. Each of these stocks is up between 10.64% (Microsoft) and 152.25% (Nividia) thus far in the year to date, leaving most AI ETFs in the dust. Small-cap companies like SoundHound AI, which has a market cap of “only” $1.68 billion, are more directly tied to the AI market, but may also be more volatile and of the make-or-break variety. Be sure that you understand your personal risk tolerance before you jump into any specific AI stocks.

Final Take

Artificial intelligence technology is exciting and new and has generated a lot of interest in the investing world. Like any new and disruptive technology, it has the potential for immense growth, but there is also the possibility for a sharp decline. It’s important to look at AI as part of a diversified portfolio that includes assets in many sectors.

FAQ

If you're new to AI investments, you might feel like you've got a big learning curve. These frequently asked questions are a good place to start.

What is the best ETF for AI?
- Global X Artificial Intelligence and Technology ETF is the top performer on the GOBankingRates list and could be the cream of the crop. In addition to producing stellar returns, the fund invests in blue chip stocks, including tried-and-true companies like Adobe and IBM.
Does Vanguard have any AI funds?
- No. The Vanguard Information Technology ETF invests in some of the same companies AI funds invest in, including Apple, Microsoft and Nvidia. However, it's not specifically an AI fund.
Is there an index for AI stocks?
- Yes. The Nasdaq CTA Artificial Intelligence and Robotics Index tracks the performance of AI and robotics companies in the technology, industrial, medical and other sectors.