The advent of ChatGPT has brought Artificial Intelligence (AI) into the limelight in 2023.
As an investor looking to capitalize on the growth of AI, you could choose to identify the Best AI stocks available to retail investors now and invest in them individually.
That said, it may be too early to determine the winners of the AI race. If you prefer to get exposure to AI, but don’t wish to bet on individual AI stocks, your next best option is to invest in AI-focused ETFs. These thematic ETFs are suitable for investors looking for exposure into AI as a disruptive technology.
Here, we present the best AI ETFs for investors who want to capitalize on the future growth of AI, without having to research into hundreds of potential AI stocks.
Best AI ETFs
| Global X Robotics & Artificial Intelligence ETF | ROBO Global Robotics and Automation Index ETF | iShares Robotics and Artificial Intelligence ETF | First Trust Nasdaq Artificial Intelligence ETF | Global X China Robotics and AI ETF | |
|---|---|---|---|---|---|
| Ticker | BOTZ | ROBO | IRBO | ROBT | 2807 (HKD) 9807 (USD) |
| Inception Date | 12 Sep 2016 | 21 Oct 2013 | 26 Jun 2018 | 21 Feb 2018 | 6 Aug 2020 |
| Expense Ratio | 0.69% | 0.95% | 0.47% | 0.65% | 0.68% |
| AUM (USD) | $1.76B | $1.33B | $0.3B | $0.24B | $0.21B |
| Performance (YTD) | 24.6% | 14.6% | 14.5% | 14.71% | 11.97% |
| Primary Exchange | Nasdaq | NYSE | NYSE | Nasdaq | Hong Kong Stock Exchange |
| Underlying Index | Indxx Global Robotics & Artificial Intelligence Thematic Index | ROBO Global Robotics and Automation Index | NYSE FactSet Global Robotics and Artificial Intelligence Index | Nasdaq CTA Artificial Intelligence and Robotics Index | FactSet China Robotics and Artificial Intelligence Index |
| No. of Holdings | 44 | 79 | 119 | 107 | 25 |
| Top 5 holdings | 1) Intuitive Surgical (ISRG) 10.07% 2) Nvidia (NVDA) 9.29% 3) Keyence Corp (6861 JP) 8.44% 4) ABB (ABBN SW) 8.27% 5) Fanuc Corp (6954 JP) 7.29% | 1) Intuitive Surgical (ISRG) 2.36% 2) Kardex Holding (KARN SW) 1.97% 3) Keyence Corp (6861 JP) 1.82% 4) Omnicell Inc (OMCL) 1.78% 5) Novanta Inc (NOVT) 1.76% | 1) Meta Platforms (META) 1.58% 2) Spotify (SPOT) 1.47% 3) Meitu (1357) 1.44% 4) IQIYI (IQ) 1.41% 5) Nvidia (NVDA) 1.39% | 1) Blackberry (BB) 2.58% 2) AeroVironment (AVA) 2.37% 3) Halma (HLMA.LN) 2.26% 4) Elbit Systems (ESLT.IT) 2.2% 5) QinetiQ (QQ/.LN) 2.18% | 1) Iflytek (002230) 9.02% 2) Kingsoft Office Software (688111) 8.94% 3) Dahua Technology (002236) 8.93% 4) Nari Tech (600406) 7.07% 5) Baidu (BIDU) 6.83% |
1) Global X Robotics & Artificial Intelligence ETF (BOTZ)
BOTZ is based on the Indxx Global Robotics & Artificial Intelligence Thematic Index and gives you global exposure to companies that could benefit from the growth of robotics and AI.
It focuses on pure play robotics and AI companies that derive at least 50% of their revenues from any of these 4 key sub-themes:
- Industrial Robots and Automation
- Unmanned Vehicles and Drones
- Non-industrial Robotics
- Artificial Intelligence
Key information on the Global X Robotics & Artificial Intelligence ETF (BOTZ)
- Inception Date: 12 Sep 2016
- Expense Ratio: 0.69%
- AUM: US$1.76B
Currently, BOTZ gives you access to companies in the following sectors:
This ETF also offers exposure to robotics and AI stocks across the world, although it is currently more focused on companies listed in the United States and Japan:
BOTZ’s Top 10 Holdings
| Ticker | Name | Weightage | What do they do? |
|---|---|---|---|
| ISRG | INTUITIVE SURGICAL INC | 10.07% | Intuitive Surgical develops and manufactures robotic assisted surgical systems. |
| NVDA | NVIDIA CORP | 9.29% | Nvidia designs and sells GPUs and chip systems. |
| 6861 JP | KEYENCE CORP | 8.449.03% | Keyence develops and manufactures industrial automation and inspection equipment. |
| ABBN SW | ABB LTD | 8.27% | ABB engineers products and systems for robotics, electrification and automation. |
| 6954 JP | FANUC CORP | 7.29% | Fanuc develops and manufactures computer numerical control (CNC) systems, lasers, robotics and factory automation solutions. |
| 6645 JP | OMRON CORP | 4.68% | Omron develops and provides automation systems for a wide range of industries including industrial, healthcare and social systems. |
| DT | DYNATRACE | 4.65% | Dynatrace provides automated software-intelligence monitoring platform powered by Artificial Intelligence. |
| 6506 JP | YASKAWA ELECTRIC CORP | 4.37% | Yaskawa manufactures industrial robots that help to automate and improve workflows. |
| 6273 JP | SMC CORP | 4.31% | SMC manufactures pneumatic control devices and automation equipment. |
| CGNX | COGNEX CORP | 4.14% | Cognex develops and manufactures machine vision technology that are used in automated manufacturing and assembly. |
BOTZ ETF Performance
Since its inception in 2016, BOTZ has returned 8.55% annually. It has also performed well, delivering a 24.6% return year-to-date.
Here’s the YTD performance comparison of BOTZ vs SPY:
2) ROBO Global Robotics and Automation Index ETF (ROBO)
ROBO is based on the ROBO Global Robotics and Automation Index and gives you global exposure to companies driving innovation in the fields of robotics, automation and artificial intelligence.
ROBO also happens to be the oldest AI ETF on this list.
Key information on the ROBO Global Robotics and Automation Index ETF (ROBO)
- Inception Date: 21 Oct 2013
- Expense Ratio: 0.95%
- AUM: US$1.33 B
Currently, ROBO gives you access to companies in the following sectors:
This ETF also offers exposure to robotics, automation and AI stocks across the world, with a heavier weightage in US and Japan stocks:
ROBO’s Top 10 Holdings
| Ticker | Name | Weightage | What do they do? |
|---|---|---|---|
| ISRG | INTUITIVE SURGICAL INC | 2.36% | Intuitive Surgical develops and manufactures robotic assisted surgical systems. |
| KARN SW | KARDEX HOLDING | 1.97% | Dynamic storage and retrieval systems in the warehouse automation space. |
| 6861 JP | KEYENCE CORP | 1.82% | Keyence develops and manufactures industrial automation and inspection equipment. |
| OMCL | OMNICELL INC | 1.78% | Omnicell manufactures automated systems for medication management for hospitals and patient engagement systems for pharmacies. |
| CGNX | COGNEX CORP | 1.76% | Cognex develops and manufactures machine vision technology that are used in automated manufacturing and assembly. |
| NOVT | NOVANTA INC | 1.75% | Novanta manufactures and sells precision photonics and motion control components and subsystems. |
| 6134 JP | FUJI CORP | 1.71% | Fuji manufactures and sells Surface Mount Machines assembly machines, and machine tools. |
| NOW | SERVICENOW INC | 1.71% | Robotic process automation tool that helps business automate workflows. |
| 6324 JP | HARMONIC DRIVE SYSTEMS INC | 2.08% | Harmonic Drive manufactures speed reducers for industrial robots and similar high precision industries. |
| IRTC | IRHYTHM TECHNOLOGIES INC | 1.65% | Developed the Zio service, a wearable biosensing technology that uses machine-learning and data analytics to help patients with heart conditions. |
ROBO ETF Performance
Since its inception in 2013, ROBO has returned 8.8% annually. Year-to-date, it has delivered a return of 14.6%.
Here’s the YTD performance comparison of ROBO vs SPY:
3) iShares Robotics and Artificial Intelligence ETF (IRBO)
IRBO is based on the NYSE FactSet Global Robotics and Artificial Intelligence Index and gives you exposure to global companies likely to drive long term growth and innovation in robotics and artificial intelligence.
It focuses on market leaders that derive at least 50% of their revenues from 22 industries within the Artificial Intelligence and Robotics theme such as Business Intelligence Software, Industrial and non-industrial robotics, semiconductors, and many others.
IRBO is the newest AI ETF on our list and also offers the lowest expense ratio.
Key information on the iShares Robotics and Artificial Intelligence ETF (IRBO)
- Inception Date: 26 June 2018
- Expense Ratio: 0.47%
- AUM: US$0.3B
Currently, IRBO gives you access to companies in the following sectors:
This ETF offers global exposure to robotics and AI stocks, with at least 50% of its market value in US listed stocks:
IRBO’s Top 10 Holdings
| Ticker | Name | Weightage | What do they do? |
|---|---|---|---|
| META | META PLATFORMS | 1.58% | Social networking platform that offers advertising and business insights solutions. |
| SPOT | SPOTIFY TECHNOLOGY | 1.47% | Provides audio streaming where recommendations are powered by AI to optimize for user satisfaction. |
| 1357 | MEITU | 1.44% | Meitu Inc uses AI to power its selfie apps. |
| IQ | IQIYI | 1.41% | Online entertainment video service in China, much like Netflix. |
| NVDA | NVIDIA CORP | 1.39% | Nvidia designs and sells GPUs and chip systems. |
| MOMO | HELLO GROUP | 1.31% | Social and entertainment platform in China. |
| HUBS | HUBSPOT INC | 1.27% | Marketing, sales and customer service software. |
| SUMO | SUMO LOGIC | 1.27% | SaaS analytics platform that helps businesses to monitor and secure their company networks. |
| KC | KINGSOFT CLOUD | 1.25% | Infrastructural cloud computing service in China. |
| 3443 | GLOBAL UNICHIP CORP | 1.24% | A worldwide fabless ASIC design service company. |
IRBO ETF Performance
Since its inception in 2018, IRBO has returned 6.94% annually. Year-to-date, it has delivered a return of 14.5%.
Here’s the YTD performance comparison of IRBO vs SPY:
4) First Trust Nasdaq Artificial Intelligence ETF (ROBT)
ROBT is based on the Nasdaq CTA Artificial Intelligence and Robotics Index and gives you global exposure to enablers, engagers and enhancers in the fields of artificial intelligence and robotics.
This is how First Trust defines:
- Enablers – Companies that develop the building block components for robotics or AI, such as advanced machinery, autonomous systems/self-driving vehicles, semiconductors, and databases used for machine learning.
- Engagers – Companies that design, create, integrate, or deliver robotics and/or AI in the form of products, software, or systems.
- Enhancers – Companies that provide their own value-added services within the AI and robotics ecosystem, but which are not core to their product or service offering.
Key information on the First Trust Nasdaq Artificial Intelligence ETF (ROBT)
- Inception Date: 21 Feb 2018
- Expense Ratio: 0.65%
- AUM: US$0.24B
Currently, ROBT gives you access to companies in the following sectors:
This ETF offers global exposure to robotics and AI stocks, with at least 50% of its market value in US listed stocks:
ROBT’s Top 10 Holdings
| Ticker | Name | Weightage | What do they do? |
|---|---|---|---|
| BB | BlackBerry Ltd | 2.54% | Cybersecurity software. |
| AVAV | AeroVironment, Inc. | 2.34% | Manufacturer of Unmanned Aircraft Systems, Unmanned Aerial Vehicles, Tactical Missile Systems, Unmanned Ground Vehicles. |
| HLMA.LN | Halma | 2.26% | Makes products for hazard detection and life protection. |
| ESLT.IT | Elbit Systems Ltd | 2.20% | Offers a wide range of defense, homeland security and commercial programs. |
| QQ/.LN | QinetiQ Group | 2.18% | A multinational defence technology company that offers testing and evaluation capabilities. |
| DT | Dynatrace | 2.10% | Dynatrace provides automated software-intelligence monitoring platform powered by Artificial Intelligence. |
| NOW | ServiceNow | 2.06% | Robotic process automation tool that helps business automate workflows. |
| AI | C3.ai | 2.04% | All-in-one Enterprise AI application. |
| CDNS | Cadence Design Systems, Inc. | 2.01% | Offers system design solutions that are used for designing of electronics systems, integrated circuits, and electronic devices. |
| DSY.FP | Dassault Systemes SE | 1.98% | Software for 3D product design, simulation, manufacturing and other 3D related products. |
ROBT ETF Performance
Since its inception in 2018, ROBT has returned 6.4% annually. Year-to-date, it has delivered a return of 14.7%.
Here’s the YTD performance comparison of ROBT vs SPY:
5) Global X China Robotics and AI ETF (2807/9807)
The Global X China Robotics and AI ETF is based on the FactSet China Robotics and Artificial Intelligence Index that gives you exposure to Chinese companies involved in the precision, automation and robotics value chain.
Most of the AI ETFs provide an overweighted exposure to companies listed in the US. Hence, this China AI ETF offers a unique proposition, especially for investors who are bullish about China’s role in the development of Artificial Intelligence.
2807 is the ticker for the ETF trading in HKD, 9807 is the ticker for the USD variant. They are both listed on the Hong Kong Stock Exchange.
Key information on the Global X China Robotics and AI ETF (2807/9807)
- Inception Date: 6 Aug 2020
- Expense Ratio: 0.68%
- AUM: US$20.95M
Currently, this ETF gives you access to companies in the following sectors:
Global X China Robotics and AI ETF’s Top 10 Holdings
| Ticker | Name | Weightage | What do they do? |
|---|---|---|---|
| 002230 | Iflytek | 9.02% | iFLYTEK offers AI driven voice recognition software and language exchange solutions. |
| 688111 | Kingsoft Office Software | 8.94% | Kingsoft Office Software distributes productivity and antivirus software. |
| 002236 | Dahua Technology | 8.93% | Dahua provides video surveillance products and solutions. |
| 600406 | Nari Technology | 7.07% | Nari develops power grid automation and industrial control products. |
| BIDU | Baidu | 6.53% | Internet service company powering one of the most popular search engines in China. |
| 002415 | Hikvision | 6.29% | Hikvision produces video surveillance products and cloud based data storage and analytics systems. |
| 300496 | Thunder Software | 6.16% | Thunder Software provides software solutions that power the IoT, mobile and automotive industry. |
| 300450 | Lead Intelligent Equipment | 6.13% | Manufacturer of high-tech equipment such as electronic capacitors, lithium batteries equipment and more that would support AI expansion. |
| 300124 | Inovance Technology | 5.33% | Inovance provides industrial automation solutions. |
| 688777 | Supcon Technology | 5.10% | Manufacturer of industrial automation control products. |
Global X China Robotics and AI ETF Performance
Since its inception in 2020, the Global X China Robotics and AI ETF has returned -7.32% annually. With China reopening and loosening their regulations, this ETF delivered a 11.97% return year-to-date.
Here’s the YTD performance comparison against SPY:
Why invest in Artificial Intelligence?
AI as a technology isn’t new – Google has been using it to improve their search capabilities, Netflix has been using it to recommend titles you are more likely to watch, AI can even manage ETFs. However, it has been brought into the limelight this year after OpenAI released its AI chatbot, ChatGPT, for free public use.
At the point of writing, the market size of global AI is estimated to be about US$100-150B in 2022. It is forecasted to grow at a CAGR of ~37% and hit a value of ~US$1,600B by 2030.
Given its enticing growth rate, there’s little wonder why astute investors are looking to invest in the future of AI.
Risks of investing in Artificial Intelligence
I wouldn’t be doing you justice if I fail to mention the potential risks of investing in Artificial Intelligence. So, here’re the key risks that you should be comfortable with before you put your capital into the best AI ETFs:
- Most early innovators fail
Artificial Intelligence is in the early phase of adoption. Although it is likely to grow as an industry going forward, today’s players may not survive this early phase.
On top of that, potential winners may not be investible via AI ETFs as they may be startups or private companies that have yet to be listed.
- Current market may be overpriced by hype
Thanks to the current interest in AI, even small AI stocks are being pumped. This suggests that the current market may be overvalued purely due to the hype. Current prices of AI ETFs (and stocks alike) may collapse when the AI hype cools off.
Which AI ETF is the best for you?
Although the AI ETFs seem similar, they offer slightly different methodologies to selecting their constituents. On top of understanding how they select their holdings, you should also take the following into consideration:
- Expense ratio aka management fee: this will eat into your overall returns.
- Global diversification: AI is a competitive industry with companies across the world fighting for top seed. You may want to consider an ETF that offers a balanced diversification across countries.
Want to learn more?
If you’re new to ETF investing, read our guide on “How to invest in ETFs” to get up to speed.
If you prefer to bet on specific companies in the AI race, here’re the best AI stocks for your consideration.