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The world in the last few years has been shifting paradigm towards machine intelligence or artificial intelligence (AI). This is no longer the exclusive domain of IT goliaths; it is constantly acting as a building block for various sectors. For this reason, several investors are emerging to make good use of this matter, and there are newly created ETFs that are focused on specific AI.
The world AI market was estimated at around $ 136.55 billion in 2023 and is expected to reach a CAGR of 38.1% in the forecast period from 2023 to 2030. This exponential growth spurt is seen by many investors wanting to get on the AI bandwagon. AI-themed ETFs are relatively new, but they offer a way to invest in the technology without choosing specific equities to invest in.
AI ETFs are Exchange-traded funds that have stocks that are tied to artificial intelligence. Such funds usually comprise establishments that focus on AI, teaching machines, data analysis, robotics, and automation. This is the case since it is possible to diversify many companies to reduce the risks of investment. The sectors represented by AI-enabled companies range from healthcare and finance to transportation and entertainment industries and beyond.
Several new ETFs have emerged recently, each with its unique focus and strategy:
1. Global X Robotics & Artificial Intelligence ETF (BOTZ): This ETF that targets firms within robotics and artificial intelligence started in 2023. It has more than 70% of its investments in U.S. companies to give investors direct access to major industry players that leverage artificial intelligence.
2. ARK Autonomous Technology & Robotics ETF (ARKQ): While not necessarily brand new, ARKQ has broadened its investment universe to contain even more AI-enabled equities in 2024. ARK Invest is well aware of liberal investment approaches, and this fund has been designed to focus on automation and artificial intelligence industries.
3. First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT): It is an ETF aiming to invest in companies with a high involvement in artificial intelligence and robotics. ROBT thus aims to reach out to a diversified customer base that is made up of businesses in sectors that use AI technologies.
Investing in AI ETFs offers several advantages:
Diversification: Instead of betting on a single company, investors can spread their investment across multiple firms, reducing the risk associated with individual stocks.
Access to Innovation: AI is a rapidly evolving field. By investing in these ETFs, individuals can gain exposure to companies at the forefront of technological advancements.
Expert Management: Many ETFs are managed by financial experts who conduct thorough research to select the best-performing companies, allowing investors to benefit from professional insights.
As artificial intelligence continues to reshape the business landscape, new ETFs focused on this technology present an exciting opportunity for investors. With projections suggesting that the AI market will reach over $1 trillion by 2030, the potential for growth in this sector is substantial.
AI ETFs could be a smart choice for diversifying theirportfolios while embracing the future. With various options available, investors can find a fund that aligns with their goals and risk tolerance, all while riding the wave of AI innovation
