How To Invest In The Future Of Artificial Intelligence

Artificial Intelligence has been grabbing headlines because of the recent developments related to the industry and the technology’s real-world application.

Fueling the story, OpenAI just released ChatGPT, a free chatbot that’s become wildly popular. For one, according to Medium.com, “One of the primary reasons ChatGPT is disruptive is that it represents a significant advancement in the ability of AI systems to understand and generate human-like text… it has the potential to revolutionize the way we interact with AI.”

And that potential revolution could trigger a major windfall for early investors… According to Grand View Research, the global AI boom could grow from about $137 billion in 2022 to more than $1.81 trillion by 2030.

Even the White House has taken notice.

In fact, both the United States government and European Union agreed to work together to develop new AI tools. According to National Security Advisor Jake Sullivan:

“This collaborative effort will drive responsible advancements in AI to address major global challenges with a joint development model and integrated research to deliver benefits to our societies through five key areas of focus: Extreme Weather and Climate Forecasting, Emergency Response Management, Health and Medicine Improvements, Electric Grid Optimization, and Agriculture Optimization.”

While we can always invest in AI stocks, such as Microsoft (MSFT), Nvidia (NVDA), C3.AI (AI), Splunk (SPLK), and even Palantir (PLTR), it’s possible to own more for less with an AI-related ETF.

Not only will an ETF allow you to diversify with dozens of top AI names, it will allow you to do so at a lower cost. For example, the Global X Robotics & Artificial Intelligence ETF (BOTZ) offers exposure to 42 industry-related stocks.

Trading for roughly $24, so if I were to buy 100 shares of the ETF, it would only cost me around $2,400. However, if I were to buy just one of the top BOTZ holdings – Nvidia – for example, it would cost me $22,400 for the same number of just that one stock.

The diversity is also helpful because it doesn’t require that you learn about every company only to be left scratching your head about which company will be the best fit for your portfolio. You gain broad exposure to the entire sector, in anticipation of it growing as a whole. It’s the old “rising tides lift all boats” approach to investing.

Interested In AI? Take A Look At These ETFs

The Global X Robotics & Artificial Intelligence ETF (BOTZ)

This AI themed ETF has an expense ratio of 0.68%, and invests in companies that could benefit from increased adoption and utilization of robotics and artificial intelligence (AI), including those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles. Some of its top holdings include Nvidia, SMC Corp., ABB Ltd., and Cognex Corp., for example.

The iShares Robotics and AI Multi Sector ETF (IRBO)

With an expense ratio of 0.47%, the ETF invests in companies benefiting from growth and innovation in robotics technologies and artificial intelligence. Some of its top holdings include IQIYI (IQ), Hell Group, Sumo Logic (SUMO), Spotify (SPOT), Meta Platforms (META), and Baidu (BIDU).

First Trust NASDAQ Artificial Intelligence & Robotics ETF (ROBT)

This ETF seeks investment results that correspond generally to the price and yield (before the Fund’s fees and expenses) of an index called the Nasdaq CTA Artificial Intelligence and Robotics Index, as noted by First Trust. Some of its top holdings include C3.AI, AutoStore, Ambarella (AMBA), Atos, NICE Ltd. (NICE), and Dynatrace Inc. (DT). ROBT also has a relatively low expense ratio just of 0.65%, well within the average for a fund such as this.

How to Unlock More Opportunity With Magnifi Personal

All three of these funds were found using the “trending themes” and search function over at Magnifi.com. Finding the top performers is as easy as typing in what you’re looking for and hitting “search.”

You can take your analysis a step further using Magnifi Personal, which allows you to compare these funds to each other, or to any other security you may be interested in. And once you’ve found the stock or fund you’re looking for, you can purchase shares directly with your Magnifi account.

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Until next time, take good care…