Artificial intelligence (AI) has been a huge catalyst for the portfolios of many investors over the past several years. Large tech companies are spending hundreds of billions of dollars to build out their AI hardware infrastructure, creating massive winners like semiconductor designer Nvidia.
But not everyone wants to go hunting for the next big AI winner, nor is it easy to know which company will stay in the lead even if you do your own research and find a great artificial intelligence stock to buy. That's where exchange-traded funds (ETFs) can help.
If you're afraid of missing out on the AI boom, and have around $100 to invest right now, here are three great AI exchange-traded funds that will allow you to track some of the biggest names in artificial intelligence, no matter who's leading the pack.
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1. Global X Artificial Intelligence and Technology ETF
The Global X Artificial Intelligence and Technology ETF (AIQ +3.20%) is one of the top AI ETF options for investors because it holds a diverse group of around 90 stocks, spanning semiconductors, data infrastructure, and software. Its portfolio includes household names like Nvidia, Microsoft, and Alphabet, alongside lesser-known players that give investors exposure to AI companies they might not otherwise consider.
Another strength of AIQ is its global reach: the fund invests in both U.S. and international companies, providing broader diversification across the AI landscape. Of course, this targeted approach comes at a cost. AIQ's expense ratio of 0.68% is slightly higher than the average ETF (around 0.56%), but it's in line with other AI-focused funds.
Performance-wise, the Global X Artificial Intelligence and Technology ETF has rewarded investors. Over the past three years, it gained 117%, trouncing the S&P 500's 63% return over the same period. While past performance doesn't guarantee future results, this track record shows how powerful exposure to AI-focused companies can be.
NASDAQ: AIQ
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2. Global X Robotics and Artificial Intelligence ETF
As its name suggests, the Global X Robotics and Artificial Intelligence ETF (BOTZ +2.92%) focuses on both robotics and artificial intelligence companies, as well as automation investments. Two key holdings in the fund are Pegasystems, which is an automation software company, as well as Intuitive Surgical, which creates robotic-assisted surgical systems. And yes, you'll still have exposure to top AI stocks, including Nvidia as well.
Having some exposure to robotics and automation could be a wise long-term investment strategy. For example, UBS estimates that there will be 2 million humanoid robots in the workforce within the next decade and could reach 300 million by 2050 -- reaching an estimated market size of $1.7 trillion.
NASDAQ: BOTZ
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If you're inclined to believe that robotics is the future, the Global X Robotics and Artificial Intelligence ETF is a good way to spread out your investments across 49 individual companies that are betting on this future. You'll pay an annual expense ratio of 0.68% for the fund, which is comparable to the Global X Artificial Intelligence and Technology ETF's fees.
The fund has performed slightly better than the broader market over the past three years -- gaining about 68%. Still, as robotics grows in the coming years, this ETF could be a good place to have some money invested.
3. iShares Future AI and Tech ETF
And finally, the iShares Future AI and Tech ETF (ARTY +3.96%) offers investors exposure to 48 global companies betting on AI infrastructure, cloud computing, and machine learning.
NYSEMKT: ARTY
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Some of the fund's key holdings include the semiconductor company Advanced Micro Devices, Arista Networks, and the AI chip leader Broadcom, which just inked a $10 billion semiconductor deal with a large new client (widely believed to be OpenAI). In addition to its diversification across AI and tech companies, the iShares Future AI and Tech ETF also has a lower expense ratio than some of its peers, charging just 0.47% annually.
The fund has slightly underperformed the S&P 500 lately, gaining about 61% compared to the broader market's 63% gains over the past three years. But with its strong diversification among tech and AI leaders, as well as its lower expense ratio, investors looking for a solid play on the future of artificial intelligence will find what they're looking for in this ETF.
