The iShares Robotics and Artificial Intelligence ETF has undergone a full rebrand and is now the iShares Future AI & Tech ETF (ARTY +2.25%). Along with the name change came a switch to a new benchmark, meaning the exchange-traded fund (ETF) now selects and weights its holdings using a different set of rules.
Exchange-Traded Fund (ETF)
Whether this new approach is an improvement over its previous iteration is the key question investors will want to answer before deciding whether this fund deserves a place in their portfolio.
NYSEMKT: ARTY
Key Data Points
What is iShares Future AI & Tech ETF (ARTY)?
The iShares Future AI & Tech ETF is a thematic ETF that passively tracks the Morningstar Global Artificial Intelligence Select Index. A thematic ETF is not limited to a single sector but instead blends companies from various parts of the market that are connected by a common theme -- in this case, artificial intelligence (AI).
The iShares Future AI & Tech ETF's holdings span multiple AI subthemes, including generative AI, AI data and infrastructure, AI software, and AI services. The fund is globally focused, with a large U.S. presence alongside several international players.
It currently manages just under $1.3 billion in assets and trades with a 0.09% 30-day median bid-ask spread, making it reasonably liquid for most investors.
Should I invest in iShares Future AI & Tech ETF (ARTY)?
If you want AI exposure without building your own list of AI stocks and find traditional tech ETFs too narrow, the iShares Future AI & Tech ETF offers a way to outsource that. Benefits include global diversification and a portfolio spanning multiple AI subthemes beyond just chipmakers and software giants.
However, as a thematic ETF, it tends to be pricier. The recent benchmark and name change may also concern investors who prefer long-term consistency in strategy.
Does iShares Future AI & Tech ETF (ARTY) pay a dividend?
The iShares Future AI & Tech ETF does not currently pay a dividend. AI companies tend to have low dividend yields because they reinvest heavily in growth, and the ETF's higher expense ratio further reduces distributable income. If the iShares Future AI & Tech ETF ever does pay a dividend, distributions would likely be semiannual.
Expense Ratio
What is iShares Future AI & Tech ETF's expense ratio?
The iShares Future AI & Tech ETF has an expense ratio of 0.47%, or $47 annually for every $10,000 invested. This is pricier than most sector or broad market ETFs but is in line with the average for thematic funds.
Historical performance of iShares Future AI & Tech ETF (ARTY)
Metric | 1 Year | 3 Years | 5 Years |
|---|---|---|---|
Net Asset Value | 23.34% | 16.31% | 7.85% |
Market Price | 23.75% | 16.41% | 7.89% |
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The final word on iShares Future AI & Tech ETF (ARTY)
There's no shortage of AI-themed ETFs, and iShares Future AI & Tech ETF's approach isn't drastically different from its competitors. The iShares brand may offer some comfort, but its holdings and weighting methodology are fairly standard for the space.
The expense ratio is average for a thematic ETF but not cheap, and the benchmark change means there's limited historical data for its current strategy. Investors should compare iShares Future AI & Tech ETF against other AI funds before committing, as similar exposure may be available at a lower cost or with a longer track record.
