How to Invest in Roundhill Generative AI ETF (CHAT)

The Roundhill Generative AI ETF (NYSEMKT:CHAT) is an exchange-traded fund (ETF) that invests in companies involved in generative artificial intelligence (AI). The fund is managed by Roundhill Investments, a registered investment advisor founded in 2018 that focuses on exchange-traded funds.

ETFs can enable investors to diversify holdings in various assets while getting automatic exposure to numerous investments. Instead of purchasing individual shares of the stocks contained in the ETF, you can become part owner of all the assets contained in the fund's portfolio with a single purchase of however many shares of the ETF you select.

If you're interested in buying shares of the Roundhill Generative AI ETF, here's what you need to know about how to invest, its holdings, dividends, expense ratio, and more.

What is CHAT?

What is the Roundhill Generative AI ETF?

Launched in 2023, the Roundhill Generative AI ETF is an exchange-traded fund that invests in companies playing a vital role in the expansion of generative artificial intelligence. The fund is actively managed and is designed to capitalize on the advancements in AI and robotics.

The ETF offers investors the opportunity to participate in the growth potential of a rapidly evolving industry and could be a compelling choice for investors eager to explore the future of artificial intelligence. The ETF invests in 50 companies globally that are involved in generative AI and related technologies, including companies in both developed and emerging markets.

How to invest

How to buy the Roundhill Generative AI ETF

The Roundhill Generative AI & Technology ETF is the world's first-ever generative AI ETF. Buying shares of the ETF is fast and easy. Here's what you need to do.

• Step 1: Open your brokerage app: Log into your brokerage account where you handle your investments.
• Step 2: Search for the ETF: Enter the ticker (CHAT) or ETF name into the search bar to bring up the ETF's trading page.
• Step 3: Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this ETF.
• Step 4: Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
• Step 5: Submit your order: Confirm the details and submit your buy order.
• Step 6: Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

ETF holdings

Holdings of the Roundhill Generative AI ETF

The Roundhill Generative AI ETF holds 50 stocks as of early 2025. Companies with larger market caps will have a more notable impact on the ETF's performance. The fund's top 10 holdings are as follows:

1. Nvidia (NVDA 1.52%): 7.31%
2. Alphabet Class A (GOOGL 1.3%): 5.23%
3. Meta Platforms (META 0.28%): 4.88%
4. Microsoft (MSFT 0.22%): 4.78%
5. Palantir Technologies (PLTR 1.48%): 4.39%
6. SK Hynix (BDL:HYNSE): 3.30%
7. Taiwan Semiconductor Manufacturing Co (TSM -0.98%): 3.29%
8. Dell Technologies (DELL 1.17%): 3.26%
9. Hewlett Packard Enterprise (HPE -9.69%): 3.09%
10. Baidu (BIDU 0.3%): 2.89%

In terms of sector breakdown, the ETF’s composition is as follows:

• Information Technology: 71.6%
• Communication Services: 16.8%
• Utilities: 4.6%
• Consumer Discretionary: 3.5%
• Industrials: 3.3%

A total of 93% of the holdings in the ETF's portfolio are large-cap businesses, while 5.7% are mid-cap companies. Just 1.2% of the Roundhill Generative AI ETF's portfolio is composed of small-cap stocks.

Should I invest?

Should I invest in the Roundhill Generative AI ETF?

The Roundhill Generative AI ETF invests in a broad selection of publicly traded companies that are heavily involved in the development and application of generative artificial intelligence technologies. This focus allows investors to gain exposure to the growth potential of this emerging sector with a single investment. The fund's holdings are companies actively working on technology such as large language models, deep learning algorithms, and other advanced AI techniques capable of generating text, images, or code.

Unlike passively managed ETFs that track an index, the Roundhill Generative AI ETF is actively managed, meaning the fund managers actively research and select the companies they believe have the most potential in the generative AI space. All of these factors could induce some long-term investors to take a slice of the action by investing in this ETF.

However, as with any emerging technology-focused investment, there is risk associated with the potential for regulatory changes, technological disruptions, and the possibility that generative AI may not reach its expected market penetration. Roundhill Generative AI ETF does not currently pay a dividend either, so investors hoping for consistent investment income from regular dividend distributions may prefer a different ETF or mutual fund.

Dividends

Does the Roundhill Generative AI ETF pay a dividend?

No, the Roundhill Generative AI ETF does not pay a dividend. Many ETFs pay a dividend on a quarterly or even monthly basis. Many of the stocks contained in the Roundhill Generative AI ETF's portfolio are not dividend payers either.
As of early 2025, the fund's 30-day SEC yield is negative. The 30-day SEC yield is a calculation that measures the interest and dividends earned in the last 30 days.

Expense ratio

What is the Roundhill Generative AI ETF’s expense ratio?

Roundhill Generative AI ETF's expense ratio is 0.75%. This means that a $10,000 investment in this ETF would require an investor to pay an annual fee of $75. The average expense ratio for an actively managed ETF is around 0.5% to 0.75%.

Historical performance

Historical performance of the Roundhill Generative AI ETF

Unlike many ETFs, the Roundhill Generative AI & Technology ETF does not track an index. It is an actively managed fund that invests in companies involved in artificial intelligence and related technologies. The table below shows how the ETF has performed since its inception in 2023.

Related investing topics

The bottom line on the Roundhill Generative AI ETF

The rapid evolution of artificial intelligence and the field of generative artificial intelligence have created many exciting opportunities for companies and investors alike. If you want to invest in an actively managed fund like the Roundhill Generative AI ETF that offers broad exposure to the companies leading the way towards the future of artificial intelligence, this ETF could be a solid selection for your portfolio. However, investors looking for consistent dividend income or lower fees may choose to look elsewhere.

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