As a savvy investor, you may focus on exchange-traded funds (ETFs), collections of securities bought or sold on the stock exchange. ETFs offer numerous benefits to holders and traders, including easy acquisition and management and low-cost purchase prices. ETFs also allow investors to dip into sectors and industries that may be challenging to enter otherwise, such as through expensive or popular stocks and bonds.
Artificial intelligence (AI), robotics, and automation may be the most promising investment domains. Every sector, industry, and business benefits from advances in computing power, such as cloud technologies.
Since this is the case, Artificial Intelligence Exchange-Traded Funds (AI ETFs) may be an excellent way to take advantage of a broad range of AI companies or companies investing in the AI market. Likewise, it allows you to benefit from multiple underlying asset types.
While selecting AI tech stocks can be less challenging than choosing specific securities or companies, it is still important to make an educated investment. If you are looking for the best Artificial Intelligence ETFs, look no further than these top choices.
How Do You Choose the Right Artificial Intelligence ETF
When selecting the best Artificial Intelligence ETFs, it is important to consider a few key elements. Like most ETFs, you should look at holdings, volume, expenses, and performance. When comparing ETFs, these factors can show you which bundles are worth investing in and if you can benefit from them.
The first thing to verify is the ETF holdings of specific AI technologies. AI ETFs invest in companies involved in AI research and development or partially (at least 25% of the collection) invested in such companies.
Alternatively, AI ETFs can refer to bundles of securities AI technology selects. It is essential to ensure your AI ETF reflects what you are looking for and comprises an appropriate portion of the total package.
Secondly, volume can show you the popularity of AI ETFs. No matter what type of underlying assets, a high volume indicates better trading or liquidity.
Next, you should turn to expenses to verify how much of your investment is administrative costs. Compared with past performance, you can determine whether high administrative costs are worth it or if you prefer to handle an AI ETF with a lower expense ratio. In most cases, an expense ratio of below .20% is a low fee and a ratio above 1% is expensive.
Lastly, performance is a critical factor in its own right. While history can never predict future performance or returns, it shows how consistent it has been and how closely it tracks its benchmark index (such as the S&P 500 or the Nasdaq 100).
This expert list of the best AI ETFs below analyzes and categorizes each contender according to these crucial considerations. It takes the guesswork out of your selection, helping you choose the right AI ETF.
Best Artificial Intelligence ETFs
1) Best AI ETF Showing Continuous Growth: Global X Robotics & Artificial Intelligence Thematic ETF (BOTZ)
Global X Robotics & Artificial Intelligence Thematic ETF (BOTZ) has 41 holdings in companies that could benefit from AI and Robotics. The companies are heavily involved in Information Technology (IT) and Industries, although they have sprinklings in other sectors. Top companies include ABB Ltd, Keyence Corp, Intuitive Surgical Inc, Fanuc Corp, and Nvidia Corp.
It is safe to say that BOTZ is a popular AI ETF. Its inception date was in 2016, taking only six years to reach $1.384 billion in total net assets. The average volume is 510 260, offering high liquidity.
Turning to expenses, ownership of BOTZ ETFs has a .68% expense ratio. While this is on the higher end of expenditures for ETFs, the final cost depends on the amount you invest.
Historically, BOTZ has stayed close to the benchmark index. Since its inception in 2016, its average market price is 6.12%, while its index is 6.53%. As it has shown consistency at all one-year, three-year, and five-year marks, this bodes well for future performance.
Pros:
- One of the largest AI ETFs
- Heavy interest in two rapidly expanding domains of Artificial Intelligence and Robotics
- Concentrated on Information Technology and Industrial Robotics and Automation
- Global exposure, with a high concentration in the United States and Japan.
- Consistent historical performance.
- High volume.
- Ask Prices and Bid Prices are fairly close
Cons:
- Top heavy with most of the net assets held in top 5-10 companies.
- Higher than the average expense ratio
- Global exposure may bring risks
See Related: Best ETF Brokerage Options
2) Best AI ETF with a Diverse Portfolio: ETF Robo Global Robotics & Automation Index (ROBO)
Robo Global Robotics & Automation Index (ROBO) was the first ETF tracking the robotics and automation industries, launched in 2013. ROBO comprises 82 global funds (all stocks) invested in Artificial Intelligence, robotics, and automation technologies and applications. Top holdings include Intuitive Surgical Inc., Harmonic Drive Systems Inc., and Illumina Inc., although all holdings have relatively equal weightings.
ROBO has 1.24 billion in net assets, securing it as one of the best Artificial Intelligence ETFs. While it is popular, it has a moderate volume of 68,730 trades.
As promising as an ETF may appear, keeping an eye on the expenses is crucial. ROBO’s expense ratio is .95%, edging on a high rate. Despite this, remember its past performance while determining if this is the right price for you. Apart from last year, ROBO closely tracks the benchmark index.
Pros:
- One of the largest AI ETFs
- A large and diverse portfolio of holdings
- Global exposure with a concentration in the United States and Asia
- Investments in both technology development and applications in various industries
- Good historical performance
- Ask Prices and Bid Prices are fairly close
Cons:
- Higher than average expense ratio
- Moderate volume
- Global exposure may bring risks
See Related: Lamb Weston Holdings, Inc. ESG Profile (LW): Is It Sustainable?
3) Best AI ETF Gaining Ground: First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)
First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT) is a fund collection tracking the Nasdaq CTA Artificial Intelligence and Robotics Index. This index includes companies invested in Artificial intelligence, robotics, and automation.
They design, develop, or provide AI systems or services. Furthermore, each company must meet specific qualifications, such as a market capitalization of at least $250 million, a daily trading volume of at least $3 million, and a free float of at least 20%.
ROBT has an expansive portfolio of 113 holdings, heavily concentrating on information technology, industrial developments, and consumer discretionary. Top companies include PROS Holdings Inc., AVEVA Group Plc, Cadence Design Systems Inc., Halma Plc, and AeroVironment, Inc. Weighting ranges from 0.02% to 2.63% of the total shares.
Most of these companies are in the United States and Japan. Ultimately, ROBT offers diverse and relatively equal holdings.
Even though ROBT was only founded in 2018, offering a short performance history, it has grown steadily and indicates immense promise. It has grown in popularity, especially in the past few years. Despite this, its average volume is relatively low at 12,348 trades.
ROBT’s expense ratio is higher than average at 0.65%, meaning that for $1000 invested, there will be $6.50 in fees. However, ROBT’s performance shows excellent consistency and closely tracks its benchmark index (Nasdaq CTA Artificial Intelligence and Robotics Index).
Pros:
- One of the surging AI ETFs
- A large and diverse portfolio of holdings
- Strict Qualifications for Index
- Global exposure with a concentration in the United States and Japan
- Excellent performance
- Ask Prices and Bid Prices are fairly close
Cons:
- Higher than the average expense ratio
- Short performance history
- Lower-than-average volume
See Related: Socially Responsible Investing
4) Best AI ETF with Low Expense Ratios: iShares Robotics and Artificial Intelligence Multisector ETF (IRBO)
iShares Robotics and Artificial Intelligence Multisector ETF (IRBO) is a stock collection tracking the NYSE FactSet Global Robotics and Artificial Intelligence NTR Index. This index looks at companies involved with Artificial Intelligence and robotics.
IRBO has a large AI ETF portfolio with 114 stock holdings. A significant portion (63.8%) of these investments are information technology companies, although the following 30.2% sees an even distribution amongst industrials, consumer discretionary, and communications. Companies are evenly weighted, including recognizable companies such as Advanced Micro Devices Inc, Via Technologies Inc, Harmonic Drive Systems Inc, iRobot Corp, and Teradata Corp.
Like First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT), IRBO launched in 2018. Since then, it has grown to 252.26 million in net assets. It also has a low-moderate volume of 33,385.00 trades.
Turning to its expense ratio, you will find a moderate .47%, considered average for ETFs. Compared to other artificial intelligence exchange-traded funds, this is relatively low. Its market price for the past three years tracks its benchmark, so IRBO may be an excellent choice for many investors.
Pros:
- One of the surging AI ETFs
- A large and diverse portfolio of holdings
- Equal-weighted index
- Global exposure with a concentration in the United States
- Excellent performance
- Ask Prices and Bid Prices are fairly close
- Low-average expense ratio
Cons:
- Short performance history
- Low-moderate volume
See Related: Medtronic plc ESG Profile (MDT): Is It Sustainable?
5) Best AI ETF with Exponential Growth: SPDR S&P Kensho New Economies Composite ETF (KOMP)
SPDR S&P Kensho New Economies Composite ETF (KOMP) tracks the S&P Kensho New Economies Composite Index. This index focuses on companies working on or advancing the Fourth Industrial Revolution. Accordingly, they develop cutting-edge products or services, including Artificial Intelligence, robotics, automation, and processing power.
Similar to the two best artificial intelligence ETFs, KOMP launched in 2018. However, unlike the other AI ETFs, KOMP grew exponentially. It has 574 holdings and $1.517 billion in net assets.
You may recognize big names such as Lockheed Martin Corp, Teledyne Technologies Inc., Constellation Energy Corporation, and Northrop Grumman Corp. It also has a moderate 84 549 trading volume, significantly higher than the two AI ETFs introduced in 2018.
KOMP’s expense ratio is exceptionally inexpensive, coming in at .20%. For every $1000 invested, there will only be $2.00 in fees. When looking at its performance, KOMP has shown consistency for the past three years, closely following its index. If you look at these factors together, many investors would suggest looking into KOMP for your portfolio.
One of the surging AI ETFs
- 77.5% concentration in the United States
- Massive growth in a short time
- Ask Prices and Bid Prices are fairly close
- Low expense ratio
Cons:
- Companies may explore other avenues of technological and industrial advancement beyond artificial intelligence
- One of the largest AI ETF portfolios, which may be hard for new investors to sort through
- Moderate volume
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6) Best AI ETF for Popular AI Companies in the United States: ARK Autonomous Technology & Robotics ETF (ARKQ)
ARK Autonomous Technology & Robotics ETF (ARKQ) collections companies benefit from Artificial Intelligence and automation developed by data scientists. They focus on 3D printing, self-driving vehicles, and efficient energy storage technologies.
Popular companies like Apple, Amazon, Nvidia, and Tesla may come to mind when you think of these advancements. You will find these big names included in their 30-50 holdings. Furthermore, 85.6% of their companies are in the United States.
ARKQ is an excellent way to access stock collections for emerging and advancing technology developments in the United States. Many individuals agree, signified by its moderate 99,472 trading volume.
It can be challenging for investors to access shares from large tech companies such as Apple and Tesla. Investments in ARKQ AI ETFs are a cost-effective alternative and allow individuals to benefit from stocks in various companies. As expected, the expense ratio is slightly higher than average at .75%. It may be a worthy expense, especially when analyzing its historical performance.
Since its inception in 2014, ARKQ has had higher market prices than indexes such as the S&P 500 and the MSCI World Index.
Pros:
- Popular companies in the tech world
- A modest amount of holdings, easy to analyze
- Concentration in the United States
- Good performance
Cons:
- Higher than average expense ratio
- Moderate volume
See Related: Berry Global Group, Inc. ESG Profile (BERY): Is It Sustainable?
7) Best AI ETF for Various AI Technology: Innovator Loup Frontier Tech ETF (LOUP)
Innovator Loup Frontier Tech ETF (LOUP) tracks the performance of specific companies on the Loup Froniter Tech Index. These investments focus on artificial intelligence research, robotics automation, electric cars, virtual reality, and fintech.
It has a modest 30 holdings, primarily interested in information technology and industrials. Top companies include Take-Two Interactive Software, Axon Enterprise Inc, Northrop Grumman Corp, Nasdaq Inc, Lockheed Martin Corp, and Intel Corp.
Founded in 2018, LOUP has grown significantly. It reached $34.60 million in net assets by 2022, only four years after inception.
It sees an average trading volume of 36,485 shares, which is low- moderate compared to its competitors. It has a manageable portfolio exposure but still stands out among AI stocks.
LOUP’s expense ratio is higher than average at .70%. For every $1000 invested, there will be $7.00 in fees. However, its growth over the past four years has been steady and continuous.
Furthermore, it has a good performance history. It has closely tracked the Loup Frontier Tech Index for the past three years. Compared to the NASDAQ-100 INDEX, there is a fairly large discrepancy in most years.
Pros:
- Manageable portfolio size
- Access to top company names in the tech world
- Global exposure with concentration in the United States
- Security selection from Loup
- Excellent growth
- Good performance
Cons:
- Short performance history
- Low-moderate volume
- Higher than average expense ratio
See Related: Best Solar Energy ETFs to Invest in Today
8) Best New AI ETF: WisdomTree Artificial Intelligence ETF (WTAI)
WisdomTree Artificial Intelligence ETF (WTAI) tracks the performance of companies on the WisdomTree Artificial Intelligence & Innovation Index. All investing involves risk, but this index contains companies involved or invested in AI and AI innovation powered by human intelligence.
It has 75 holdings, including companies such as Faraday Technology Co, Blackberry Ltd, Palo Alto Networks Inc, and Synopsys Inc. Most investments are in American or Taiwanese-based companies. However, there are sprinklings in other countries.
WTAI is a new artificial intelligence exchange-traded fund; its inception was in 2021. Since this is the case, all conclusions come from short-term data. Despite this, it shows great potential as one of the best artificial intelligence ETFs.
It already has $814,490 in net assets and good performance tracking for the past year on the WisdomTree Artificial Intelligence & Innovation Net Total Return Index, S&P 500 Information Technology Index, and Nasdaq 100 Index. Investors can even take advantage of the typical expense ratio of .45%.
Despite these elements, it has a low volume of 3,928 shares. This may change significantly as WTAI grows and gains favor amongst investors who curate AI and machine learning stocks.
Pros:
- Early access to an up-and-coming collection of Artificial Intelligence ETFs
- Large portfolio of holdings
- Global exposure with a concentration in the United States and Taiwan
- Low-average expense ratio
- Good performance
Cons:
- Very short performance history
- Low volume
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