Best Artificial Intelligence (AI) ETFs to buy in 2023

By:

Srijani Chatterjee

Srijani was a Financial Writer for Invezz covering stocks, investment funds, securities, and commodities. She is UK law-qualified and has worked in both the legal industry... read more.

Updated: Oct 11, 2022

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With the ongoing pandemic, AI has emerged as a significant industry for lucrative commercial investment and there are ETFs that can provide exposure to this industry. As all of us increasingly relied on technology during global lockdowns, AI companies flourished with the renewed demand. This page offers a selection of the best AI ETFs for this year.

What are the top AI ETFs to buy?

Our analysts have selected five of the top AI ETFs for this year as displayed in the table below. Continue scrolling down the page to discover more about each in turn.

1. WisdomTree Artificial Intelligence ETF (MILAN:WTAI)

WTAI was created in 2018. It is listed in the United Kingdom and Germany and holds shares in 60 companies from within the AI and robotics industries. The fund seeks to track the price and yield performance of the NASDAQ CTA Artificial Index.

The fund has consistently grown since its conception. It is up 21% over the last year –  thanks in part to the surging popularity of AI stocks since the beginning of the pandemic – and has more than doubled in value since 2018.

Socially conscious investors will be happy to learn that the fund focuses on offering exposure to companies that meet WTAI’s Environmental and Social Governance (ESG) criteria in their use of AI technology. It is further reassuring that an expert AI panel conducts the research and selects companies in the Index for the fund. 

2. Global X Robotics & Artificial Intelligence ETF (NASDAQGM:BOTZ)

BOTZ emerged in 2017. It is listed in America and is more focused than the WTAI fund, as it only owns shares in  36 different companies. The fund seeks to replicate investment results that correspond with the Global Robotics & Artificial Intelligence Thematic Index.

Like most AI ETFs, the fund has been on a strong upward streak since its inception. A lot of that success is down to a handful of companies; around half of the money in BOTZ is invested in just six stocks. The largest of these is Nvidia at 12% – the company has performed particularly well over the last couple of years. 

The fund focuses on the robotics market which was valued at over $23bn in 2020, an estimate that appeals to growth investors. Robotics and AI is a sector with even greater potential, which means that the sky’s the limit for new investors. 

3. L&G Artificial Intelligence UCITS ETF (MILAN:AIAI)

AIAI was established in 2019. It is listed in the United Kingdom and currently contains 74 holdings. The fund seeks to align with the results tendered by the ROBO Global Artificial Intelligence Index.

Since the get-go, the fund’s performance has resulted in happy investors. It is up 17% since last year and is one of the most balanced AI ETFs around. Its largest holding makes up just 2% of the total fund, so it offers one of the most diverse (and least risky) opportunities on the market.

AIAI focuses on global technology stocks, which further boosts its diversity. Another positive sign is that this new fund has management that reinvests the dividends back into the fund, which is a strong indicator of commitment to the cause.

4. ARK Autonomous Technology & Robotics ETF (BATS:ARKQ)

ARKQ started out in 2016. The fund is listed in the United States and currently holds 39 companies. It focuses on investing in autonomous technology and robotics companies that align with its investment theme of disruptive innovation.

The fund’s largest holding is Tesla at 11%. Tesla is a big tech leader focused on disruptive technology and exactly the sort of company that ARKQ likes to invest in. 

A point to note is that ARKQ is an actively-managed ETF. This means a fund manager makes the decisions on what to buy or sell, rather than passively tracking an index. As such, it is a more risk-prone ETF, but there is more scope for capitalising on emerging trends than in traditional ETFs.

5. ROBO Global Robotics & Automation ETF (NYSEARCA:ROBO)

ROBO was launched in 2013. It is listed in the United States and currently has 83 holdings. The ETF presents investors with the opportunities in global companies that drive innovation in automation, AI, and robotics.

Like AIAG above, ROBO is an extremely balanced ETF that holds lots of stocks in small amounts. Its largest holding is the digital healthcare company, iRhythm, which makes up just 3% of the fund.

The fund’s diversification means that there is low specific stock risk to investors. ROBO mitigates risk by limiting its reliance on large-cap players that can really swing the market. Instead, the fund specialises on capturing the potential growth of global companies that focus on developing technology.

Where to buy the best AI ETFs

To buy these ETFs, you must register with an online broker. ETFs are like individual stocks, so you can buy or sell them as you wish. The table below is our choice of the best brokers that offer AI ETFs.

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What is an AI ETF?

It’s an exchange traded fund that holds shares in companies that operate in the AI industry. Companies in this sector focus on utilising powerful algorithms to create technology and machines that simulate human intelligence.

Artificial intelligence is considered one of the most important industries of the century as it makes production more flexible, reliable, and efficient. The global AI industry is supposed to more than double in growth over the next decade: a huge incentive for investors.   

Are AI ETFs a good investment?

Yes, they are the best bet for investors that are intrigued by the AI industry’s growth potential but wary about cherry-picking individual company stocks.This investment strategy enables investors to focus on taking profits from the growth of AI companies instead of trying to distinguish the winners from the losers.

As AI ETFs provide exposure to an innovative and rapidly growing aspect of the tech industry, they are hugely popular with growth and tech investors. It must be noted that because AI is an industry that is constantly evolving, investors must stay on top of the holdings in their chosen ETFs. If you think AI doesn’t cover as much of the industry as you’d like to, you can also check the best technology ETFs to buy.

The effect of novelty cannot be discounted. Therefore, as a new industry, AI attracts many optimistic investors. AI ETFs contain shares of companies with strong potential to transform the business world. This makes it all the more imperative to track progress in AI with the latest news and developments – you can do so by following the links below.