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A Guide to Artificial Intelligence ETFs

  • According to Research, the size of the worldwide artificial intelligence (AI) market was estimated at $454.12 Billion in 2022.
  • It is projected to reach $2,575.16 Billion.

Science fiction gave rise to artificial intelligence, sometimes known as machine intelligence, which is currently employed commercially. Large data sets, pattern identification, and even filmmaking, as well as numerous other activities, are all made easier by algorithms. 

Here, Machine learning systems play a significant role, such as those that enable autonomous driving, combat crime and computer viruses, support surgical procedures, or regulate financial market activities.

Why Are AI ETFs So Popular?

According to Research, the size of the worldwide artificial intelligence (AI) market was estimated at $454.12 Billion in 2022 and is projected to reach $2,575.16 Billion by 2032, rising at a CAGR of 19% from 2023 to 2032. The area became much more fascinating as a result of ChatGPT’s recent success. An Science fiction gave rise to artificial intelligence, sometimes known as machine intelligence, which is currently employed commercially. Large data sets, pattern identification, and even filmmaking, as well as numerous other activities, are all made easier by algorithms.  AI chatbot named ChatGPT was created by OpenAI and released in November 2022.

  • Market Analysis

According to a PWC article, artificial intelligence has the potential to significantly increase global GDP and productivity by 2030. Product improvements will account for 45% of all economic gains, increasing customer demand.

Nvidia (NVDA) is leading the charge as AI develops and changes the face of the planet, poised to capitalize on a $600 Billion market. Nvidia’s vision for accelerated computing promises an improved future fueled by AI-driven technologies while keeping sustainability in mind and building on its track record of innovation. 

AI-Powered ETFs

One can invest in an AI-focused exchange-traded fund (ETF) if they want their portfolio to have exposure to AI firms but don’t want to identify specific AI stocks. AI ETFs eliminate the need to independently research and select individual equities by offering exposure to a wide variety of the best AI companies.

Some Of The Best AI ETFs

  • Robotics & Automation Index ETF

The underlying ROBO Global Robotics and Automation Index tracks the performance of businesses that generate a part of their sales and earnings from goods or services connected to robotics or automation. The fund levies fees of 95 bps.

  • Robotics and Artificial Intelligence ETF

The underlying Indxx Global Robotics & Artificial Intelligence Thematic Index makes investments in businesses engaged in industrial robotics and automation, non-industrial robotics, and autonomous vehicles, among others, that may stand to gain from increased adoption and utilization of robotics and artificial intelligence. The fund levies fees of 69 bps.

  • Robotics and AI Multisector ETF

The equity securities of companies primarily listed in one of 43 developed or emerging market countries that are the most exposed to, or involved in, one of the 22 FactSet Revere Business Industry Classification Systems related to robotics and artificial intelligence make up the underlying NYSE FactSet Global Robotics and Artificial Intelligence Index. The fund levies fees of 47 bps.

  • Artificial Intelligence and Robotics First Trust ETF

The Nasdaq CTA Artificial Intelligence and Robotics Index, which it is based on, is intended to track the performance of businesses involved in automation, robotics, and AI. The fund levies fees of 65 bps.

Conclusion

The scope of AI ETFs seems to have positive and high growth. The best strategy for choosing which ETF to purchase is to take into consideration the stocks that a fund holds and the percentage of real AI businesses among them. The expense ratio, dividend yield, and historical performance of a fund are also crucial factors. To enhance the diversity, one might choose to invest in a basket of all four of these ETFs related to artificial intelligence.

Radhe

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