The Nasdaq Composite (^IXIC 0.35%) recently broke through the 20,000 point level to reach new highs. Investors who feel overwhelmed about picking their own stocks shouldn't fret. The beauty of exchange-traded funds (ETFs) is that they can be used to achieve targeted exposure to almost any theme, or investment strategy, you're interested in.
Investors shouldn't overthink this. There is one obvious opportunity in 2025 to beat the market -- artificial intelligence (AI). The market rally continues to be fueled by companies enabling the adoption of this technology, so focusing on top ETFs that offer adequate exposure to this opportunity is your best bet. Here are two I would buy right now.
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1. Fundstrat Granny Shots U.S. Large Cap ETF
Don't be fooled by the name. If you're looking for a fund that seeks to hold shares of industry leaders across emerging trends in the economy, not just AI, this fund is for you.
The Fundstrat Granny Shots U.S. Large Cap ETF (GRNY 0.88%) is an actively managed fund that just launched last year. The fund is led by Tom Lee, who is head of research at Fundstrat Capital. Lee previously served as JPMorgan Chase's Chief Equity Strategist from 2007 through 2014, when Lee co-founded Fundstrat Global Advisors.
Since its inception in 2024, the Granny Shots ETF is up 14.9% compared to the Nasdaq's 8.4% return at the time of writing. Lee and his team use a top-down method of selecting stocks. This means they identify key themes that are breeding opportunities, such as AI or fintech, and then select the best stocks to capitalize on those themes.
In addition to AI, the long-term themes reflected in the fund's stock holdings are millennials' increasing spending power, energy, cyber security, and improving economic conditions. These themes can change based on Fundstrat's research but this is what it is currently working with to select stocks for the fund.
Here's a quick look at the top 10 holdings in the fund as of July 17, and their respective weightings:
- Robinhood Markets (3.91%)
- Oracle (3.55%)
- Advanced Micro Devices (3.40%)
- Nvidia (3.13%)
- GE Vernova (3.03%)
- GE Aerospace (2.85%)
- Palantir Technologies (2.79%)
- KLA Corp. (2.79%)
- Goldman Sachs (2.76%)
- Caterpillar (2.76%)
One thing that might appeal to investors is that it's not going after just one trend like AI. Lee is thinking broadly about all the key trends in the economy and structuring the portfolio to profit from them.
It's worth mentioning that Lee is a regular guest on CNBC, which is beneficial for investors. If you decide to invest in the fund, there are plenty of videos of Lee's interviews on YouTube or X to get insight into his strategy and thinking.
The fund charges an expense ratio of 0.75%, which is typical for an actively managed ETF. This means for every $1,000 invested, you will incur an annual cost of $7.50.
Since this is a relatively new ETF, investors should start with a small position and average into it over time. After all, past performance isn't a guarantee of future results. But given the fund's focus on investing in industry-leading companies that have excellent growth prospects, this is a very promising ETF to consider holding for the long term.
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2. Dan Ives Wedbush AI Revolution ETF
Finally, for investors who want pure exposure to AI, look no further than a fund named after the biggest AI bull on Wall Street, Dan Ives. Ives is managing director and global head of technology research at Wedbush Securities. He's been covering the tech sector for many years as an analyst. The Dan Ives Wedbush AI Revolution ETF (IVES 0.86%) includes the top stocks from Ives' coverage universe to profit off this opportunity.
There are 30 holdings in the fund as of July 16. Here are current top 10 holdings and their respective weightings:
- Nvidia (5.62%)
- Oracle (5.28%)
- Taiwan Semiconductor Manufacturing (5.20%)
- Broadcom (4.92%)
- Microsoft (4.89%)
- Amazon (4.72%)
- Advanced Micro Devices (4.71%)
- Meta Platforms (4.64%)
- Apple (4.63%)
- Alphabet (4.50%)
Keep in mind, this fund just launched over a month ago, so it doesn't have much of a track record. But it's not difficult to tell by looking at the holdings in the fund that it is likely to perform well. It's likely to outperform the Nasdaq over the next five years, at least.
The fund has already attracted $343 million in assets since June 3, which reflects Ives' reputation as an analyst and the quality of the stocks in the portfolio.
The fund is not actively managed but charges an expense ratio of 0.75%. But so far, the fund is up 9.3% since inception in June, slightly outpacing the Nasdaq at the time of this writing.
The Fundstrat and Wedbush ETFs are likely to outperform the market over the next five years. While they will likely be more volatile than the major market indexes given their exposure to high-growth stocks, these growth ETFs are great choices for investors looking for a hands-off way to invest in the best growth stocks out there.
