8 Best Artificial Intelligence ETFs To Invest In for 2023

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Artificial Intelligence, or AI, is everywhere. While this technology has long been used in many of the electronics we use every day, the current generation of AI tools has brought machine learning to a whole new level. And wherever innovation lies, can the stock market be far behind?

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Best AI ETFs To Invest In for 2023

Investing in individual stocks in such a nascent industry can be risky. A good option for capitalizing on the popularity of AI is to invest in exchange-traded funds, or ETFs, which give you roughly the same performance as the sector (or some part of it) as a whole. Here are some of the most promising artificial intelligence ETFs to invest in for 2023:

1. Global X Robotics and Artificial Intelligence ETF (BOTZ)
2. Global X Artificial Intelligence and Technology ETF (AIQ)
3. Robo Global Artificial Intelligence ETF (THNQ)
4. Robo Global Robotics and Automation Index ETF (ROBO)
5. iShares Robotics and Artificial Intelligence Multisector ETF (IRBO)
6. First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)
7. iShares Exponential Technologies ETF (XT)
8. Ark Autonomous Technology and Robotics ETF (ARKQ)

1. Global X Robotics and Artificial Intelligence ETF

Global X Robotics and Artificial Intelligence ETF (Nasdaq: BOTZ) closed at $29.96 per share on July 13, having started the year at $20.67, for a 42.60% return year to date. This ETF holds positions in Nvidia Corp. (NVDA), Intuitive Surgical Inc. (ISRG), Cognex Corp. (CGNX) and others. 

2. Global X Artificial Intelligence and Technology ETF

Global X Artificial Intelligence and Technology ETF (Nasdaq: AIQ) has returned 42.49% year to date, closing on July 13 at $29.19. This fund is heavily weighted in technology, as the name suggests, but also holds communications services and consumer cyclical stocks. Top positions include Nvidia Corp. (NVDA), Meta Platforms Inc. (META), Tesla Inc. (TSLA), Microsoft Corp. (MSFT), Apple Inc. (AAPL) and many others.

3. Robo Global Artificial Intelligence ETF

Robo Global Artificial Intelligence ETF (NYSE: THNQ) is up 38.65% so far this year and closed at $37.36 on July 13. This is an index fund that tracks the performance of publicly traded companies that derive much of their revenue from the artificial intelligence field. It holds Nvidia Corp. (NVDA), Microsoft Corp. (MSFT), Advanced Micro Devices Inc. (AMD), Alphabet Inc. (GOOGL) and many others.

4. Robo Global Robotics and Automation Index ETF

Robo Global Robotics and Automation Index ETF (Nasdaq: ROBO) closed at $59.85 on July 13 and is up year to date by 27.50%. Its top 10 holdings represent just 17.63% of its total assets, and no single position makes up more than 2% of the fund. Top holdings include Intuitive Surgical Inc. (ISRG), Azenta Inc. (AZTA) and Zebra Technologies Corp. (ZBRA).

5. iShares Robotics and Artificial Intelligence Multisector ETF

IShares Robotics and Artificial Intelligence Multisector ETF (NYSE: IRBO) holds positions in tech and communications companies like fuboTV Inc. (FUBO), Lattice Semiconductor Corp. (LSCC), Matterport Inc. (MTTR) and Netflix Inc. (NFLX). The index is very heavily weighted toward technology, with 61.75% of its holdings in that sector. IRBO closed at $35.15 per share on July 13 and is up 35.63% year to date.

6. First Trust Nasdaq Artificial Intelligence and Robotics ETF

One of the purest AI ETFs, First Trust Nasdaq Artificial Intelligence and Robotics ETF (Nasdaq: ROBT) invests at least 90% of net assets in companies that are in the robotics and artificial intelligence segments of the tech and industrial sectors. ROBT is up 30.86% year to date and closed at $47.34 on July 13. The technology sector makes up over half (58.27%) of the investments in this fund. Palo Alto Networks Inc. (PANW) and Ambarella Inc. (AMBA) are the fund’s two largest holdings.

7. iShares Exponential Technologies ETF

IShares Exponential Technologies ETF (Nasdaq: XT) holds mostly technology stocks (53.97% of total holdings), including Nvidia Corp. (NVDA), Meta Platforms Inc. (META), Palantir Technologies Inc. (PLTR) and others. The fund closed at $57.82 on July 13 and is up 22.48% year to date.

8. Ark Autonomous Technology and Robotics ETF

Ark Autonomous Technology and Robotics ETF (ARKQ) invests in companies in autonomous technology and robotics companies that are disruptive innovators. It closed at $58.55 on July 13 and is up 42.77% year to date. Top holdings include Tesla Inc. (TSLA), UiPath Inc. (PATH) and Kratos Defense & Security Solutions Inc. (KTOS).

ETFs That Actually Use AI

If you are really all in on AI, you might want to invest in an ETF that is managed by AI. While the jury is still out on whether AI can pick better stocks than an experienced fund manager, here are some funds that use AI to at least partially create their investing models.

VanEck Social Sentiment ETF

VanEck Social Sentiment ETF (NYSE: BUZZ) uses AI to help pick the large-cap stocks in the portfolio. The fund has returned 44.12% year to date and closed at $17.51 on July 13. It’s heavy in technology but not as much as some of the AI-focused ETFs, with 34.95% of its positions in the technology sector. Top holdings include Coinbase Global Inc. (COIN), GameStop Corp. (GME) and Tesla Inc. (TSLA).

Qraft AI-Enhanced US Large Cap Momentum ETF

Qraft AI-Enhanced U.S. Large Cap Momentum ETF (NYSE: AMOM) identifies the best momentum stocks using artificial intelligence. It closed at $31.90 on July 13 and is up 21.48% so far this year. It holds positions in Amazon.com Inc. (AMZN), Meta Platforms Inc. (META), Walmart Inc. (WMT) and other consumer, industrial and technology stocks.

AI Powered Equity ETF

AI Powered Equity ETF (NYSE: AIEQ) uses EquBot, a quantitative model that runs on the IBM Watson platform to inform its holding decisions. It is up 14.06% year to date, somewhat less than many ETFs in the sector, and it closed at $32.26 on July 13. Top holdings include Alcoa Corp. (AA), Progressive Corp. (PGR) and Coterra Energy Inc. (CTRA).

Final Take

Artificial intelligence technology is exciting and new and has generated a lot of interest in the investing world. Like any new and disruptive technology, it has the potential for immense growth, but there is also the possibility for a sharp decline. It’s important to look at AI as part of a diversified portfolio that includes assets in many sectors.

Data is accurate as of July 13, 2023, and is subject to change.

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