The field of Artificial Intelligence (AI) is rapidly evolving and growing with continuous research and innovation by major companies in the segment, driving the adoption of advanced technologies across various major industries. Amid this, AI-driven ETFs can offer wide exposure to diverse companies engaged in the AI market to investors and yield potential gains.
Given this backdrop, let’s look at the fundamentally sound AI-driven ETFs Robo Global Artificial Intelligence ETF (THNQ), First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT), and Global X Robotics & Artificial Intelligence ETF (BOTZ) for exposure.
Amid the rapid digital transformation and upscaling global demand for technology, the artificial intelligence market grew beyond $184 billion this year, marking a considerable hike of over 50 billion from 2023. This remarkable growth is projected to continue, with the market likely to exceed $826 billion by 2030.
Venture capital firm Accel reported rising artificial intelligence (AI) and cloud companies funding in the U.S., Europe, and Israel after facing a slowdown in the last three years and is expected to reach $79.20 billion by the end of 2024, indicating a 27% increase from 2023.
Given these encouraging trends, let’s look at the fundamentals of the top three Technology Equities ETFs, beginning with number 3.
ETF #3: Robo Global Artificial Intelligence ETF (THNQ)
THNQ invests in companies that are contributing to the AI revolution. It includes companies developing the technology and infrastructure enabling AI, such as computing, data, and cloud services, and companies applying AI in various verticals. The funds aim to track the performance of the ROBO Global Artificial Intelligence Index.
The fund has assets under management (AUM) of $139.80 million. THNQ’s top holdings include NVIDIA Corporation (NVDA) with a 2.73% weighting, followed by JD.com, Inc. Sponsored ADR Class A (JD) at 2.49%, and Cloudflare Inc Class A (NET) and Alibaba Group Holding Limited Sponsored ADR (BABA) at 2.47% and 2.35%, respectively.
The ETF has a total of 57 holdings, with its top 10 assets comprising 23.65% of its AUM. THNQ’s expense ratio is 0.68%, higher than the category average of 0.58%. Over the past month, its fund inflows were $1.16 million and $25.28 million over the past year.
THNQ has surged 15.4% over the past six months and 35.2% over the past year to close the last trading session at $47.06. It has a beta of 1.21. And the fund’s NAV was $46.96 as of October 17, 2024.
THNQ’s POWR Ratings reflect solid prospects. The fund has an overall rating of A, translating to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
THNQ has an A grade for Trade and Buy & Hold. It also has a B grade for Peer. Within the B-rated Technology Equities ETFs group, it is ranked #44 of the 119 ETFs.
To access all THNQ’s POWR Ratings, click here.
ETF #2: First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)
ROBT is an exchange traded fund which track the performance of companies engaged in Artificial intelligence (AI), robotics and automation. The funds invest in securities listed on the global stock exchange and are classified as AI or robotics engagers, enablers, or enhancers. It tracks the Nasdaq CTA Artificial Intelligence and Robotics Index.
With $436.60 million in AUM, ROBT’s top holdings are Symbotic, Inc. Class A with a 2.59% weighting, Palantir Technologies Inc. Class A (PLTR) at 2.29%, and Upstart Holdings, Inc. (UPST) and PKSHA Technology, Inc. at 2.20% and 1.94%, respectively. The ETF has a total of 109 holdings, with its top 10 assets comprising 20.36% of its AUM.
The fund has an expense ratio of 0.65%, higher than the category average of 0.58%. It has a beta of 1.22.
ROBT has gained 6.5% over the past six months and 10.4% over the past year to close the last trading session at $43.88. The fund’s NAV was $43.87 as of October 17, 2024.
ROBT’s sound fundamentals are reflected in its POWR Ratings. The fund has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
The fund has an A grade for Trade and Buy & Hold. Of the 119 ETFs in the Technology Equities ETFs group, ROBT is ranked #31.
Click here to see all the ROBT ratings.
ETF #1: Global X Robotics & Artificial Intelligence ETF (BOTZ)
BOTZ is an ETF launched and managed by Global X Management Company LLC. The fund invests in stocks of companies involved in the development of robotics and artificial intelligence, like industrial robots, automated inventory management, and unmanned vehicles. It seeks to track the performance of the Indxx Global Robotics & Artificial Intelligence Thematic Index using a full replication technique.
The fund has an AUM of $2.57 billion. Its top holdings include NVDA with a 12.97% weighting, followed by ABB Ltd. at a 9.70% weighting, and Intuitive Surgical, Inc. (ISRG) and Keyence Corporation at 9.67% and 7.69%, respectively. BOTZ has a total of 47 holdings, with the top 10 assets comprising 65.14% of its AUM.
The fund has an expense ratio of 0.68%, compared to the category average of 0.65%.
BOTZ has gained 8.3% over the past six months and 28.6% over the past year to close the last trading session at $31.49. Also, it has a beta of 1.25. The fund has a NAV of $31.50 as of October 17, 2024.
BOTZ’s POWR Ratings reflect its strong outlook. The ETF has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
BOTZ has an A grade for Buy & Hold and Trade. The fund is ranked #15 among the 119 ETFs in the same group.
To access all the POWR Ratings for BOTZ, click here.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
BOTZ shares were trading at $32.05 per share on Friday afternoon, up $0.56 (+1.78%). Year-to-date, BOTZ has gained 12.61%, versus a 24.15% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions. More…