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The fervour around artificial intelligence has sparked a gold rush into AI-themed ETFs, as investors seek fresh ways to play the burgeoning technology following breathtaking rallies in market darlings such as Nvidia (NVDA.O).<\/p>\nThe fervour around artificial intelligence has sparked a gold rush into AI-themed ETFs, as investors seek fresh ways to play the burgeoning technology following breathtaking rallies in market darlings such as Nvidia (NVDA.O).<\/p>\n
The funds run the gamut from those offering a bouquet of the biggest AI winners to more esoteric themes such as robotics and sound generation. All told, the universe of AI-themed ETFs traded in the United States has soared to $6.88 billion as of the end of February from $2.55 billion a year earlier, Morningstar data showed.\u201cIt\u2019s still so early in the evolution of this category \u2026 that investors are still sorting through the possibilities,\u201d said Will Rhind, founder and CEO of GraniteShares.The exuberance surrounding AI funds echoes previous waves of investor excitement for other technologies viewed as transformative, from dotcom stocks to electric vehicles.Each wave introduced major new businesses to the economy and generated astonishing wealth for founders like Jeff Bezos and Elon Musk as well as ordinary investors. At the same time, many of the companies whose shares soared in previous market booms eventually saw their stock prices fizzle, a fate that may await some of the market\u2019s current AI favourites.For now, investors are responding with enthusiasm and Nvidia \u2013 whose chips are seen as the gold standard in AI \u2013 continues to grab the spotlight.The assets of the GraniteShares 2x Long NVDA Daily ETF (NVDL.O), which seeks to deliver twice the daily return of the chipmaker\u2019s shares and is not included in Morningstar\u2019s data on AI-themed funds, doubled to $2 billion earlier this month. Those flows have followed the nearly 80 per cent climb in Nvidia\u2019s shares so far this year, after the company\u2019s shares tripled in 2023.At its developer conference on Monday, the company unveiled the Blackwell B200, an AI chip it says is up to 30 times speedier than its previous chip.Smaller ETFs have also prospered. Assets in the Themes Generative Artificial Intelligence ETF (WISE.O) tripled to about $20 million from $7.5 million earlier this month, said Taylor Krystkowiak, investment strategist at Themes ETFs.Seven of the 18 diversified AI-related ETFs that Morningstar tracks have launched within the last three years. An eighth was redesigned to target AI more directly.The funds have had collective inflows of $2.68 billion in the last 12 months, according to Morningstar. That is almost double the inflows into global real estate ETFs, the company said.Whether investor excitement about the possibilities of AI is fueling a bubble or just contributing to a strong bull run in stocks is unclear.The S&P 500 (.SPX) is up nearly 8 per cent year-to-date, fueled in part by rallies in AI beneficiaries such as Nvidia and Microsoft (MSFT.O), following a 24 per cent gain last year. The AI fervour has also driven parabolic moves in the shares of other companies, including a more than 250 per cent gain in Super Micro Computer (SMCI.O), which joined the S&P 500 this week.Some investors appear to be limiting their exposure to Nvidia and other stocks that have notched big moves. ETF issuer Global X found that its Global X Artificial Intelligence and Technology ETF (AIQ.O), which caps Nvidia exposure to 3 per cent, has tripled in size over the last three months.By comparison, its Robotics and Artificial Intelligence ETF (BOTZ.O), which has more than 20 per cent of its assets invested in the chipmaker, grew by 20 per cent.Others are focused on finding new areas that will benefit from AI, said Rene Reyna, head of thematic ETF strategy at Invesco and manager of the Invesco AI and Next Gen Software ETF .\u201cThe conversations we have with investors don\u2019t focus on finding the next Nvidia, but more on recognizing that these technologies are changing the landscape and finding ways to get exposure to some of this growth,\u201d he said.Analysts at Morgan Stanley last week published a list of 480 individual stocks that may benefit from AI. Less obvious beneficiaries included Walmart (WMT.N) and Caterpillar (CAT.N). The bank also recommended exploring \u201cless crowded sub-themes\u201d like the integration of AI and smartphones.ETFs are also scrambling to provide offerings for every taste. Robo Global Robotics & Automation ETF (ROBO.P) supplements its Nvidia exposure with holdings in stocks some expect to benefit from AI technology, like Intuitive Surgical (ISRG.O). The Roundhill Generative AI & Technology ETF is focusing on companies it expects to be beneficiaries of generative AI, including Salesforce.com (CRM.N) and Marvell Technology (MRVL.O).Still, at least one flavour of AI-themed ETF has failed to win fans. The WisdomTree US AI Enhanced Value ETF (AIVL.P), which uses AI to select its portfolio, has seen outflows of $48.26 million in the last 12 months and lags the S&P 500.One possible reason the fund and others in its category have underperformed: many of them lack a position in Nvidia and other AI-related stocks.Follow the
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The excitement around artificial intelligence (AI) has led to a significant increase in investments in AI-themed Exchange-Traded Funds (ETFs) in the United States, with their total value rising from .55 billion to .88 billion from the previous year to the end of February, according to Morningstar data. This surge in interest is partly due to the impressive performance of companies like Nvidia, whose shares have seen substantial growth. Nvidia, recognized for its AI chips, recently introduced the Blackwell B200 chip, which is up to 30 times faster than its predecessor. The GraniteShares 2x Long NVDA Daily ETF, which aims to deliver twice the daily return of Nvidia’s shares, saw its assets double to billion. Other smaller AI-themed ETFs, such as the Themes Generative Artificial Intelligence ETF, have also seen significant growth in assets. Morningstar tracks 18 diversified AI-related ETFs, seven of which were launched in the last three years, and one was redesigned to focus more on AI. These funds collectively attracted .68 billion in inflows over the last 12 months. The interest in AI has contributed to a nearly 8% increase in the S&P 500 year-to-date, with significant gains in AI-related companies like Nvidia and Microsoft. Some ETFs, like the Global X Artificial Intelligence and Technology ETF, limit exposure to Nvidia to manage risk, while others, like the Robo Global Robotics & Automation ETF, include companies expected to benefit from AI technology. However, not all AI-themed ETFs have been successful, with the WisdomTree US AI Enhanced Value ETF experiencing outflows of .26 million in the last 12 months and underperforming compared to the S&P 500, possibly due to a lack of positions in Nvidia and other AI-related stocks.<\/p>\n","protected":false},"author":3,"featured_media":4657,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[842,2490,639,1902,33,3,2369,26,1734,1969,370,2110,1307,53,250,1823,899,2491,253,1033,1400,287,1565,1682,544,380,2463],"class_list":["post-4656","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-other","tag-ai","tag-ai-themed-etfs","tag-artificial-intelligence","tag-bank","tag-companies","tag-cyprus","tag-data","tag-economy","tag-electric-vehicles","tag-elon-musk","tag-etf","tag-funds","tag-generative-artificial-intelligence","tag-gold","tag-google","tag-increase","tag-interest","tag-market-darlings","tag-microsoft","tag-prices","tag-rally","tag-real-estate","tag-surge","tag-technology","tag-united-states","tag-us","tag-vehicles"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"\n