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Best AI ETFs [2024] | Top 5 Picks

best ai etfs
Nemanja Curcic

Summary: Artificial intelligence has ignited a revolution across all sectors and industries, promising automation, machine learning, and data analytics that could disrupt and transform virtually every industry. Investing in it in this early stage could bring massive returns if the current projections about AI become true. This guide will showcase the best AI ETFs and how to invest in them using a regulated investing service like Interactive Brokers.

Best Platform for Worldwide Stock Trading & Investing

  • Highly trusted multi-asset broker with clients in over 200 countries

  • Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)

  • Low commissions starting at $0 with no platform fees or account minimums

  • Easily fund your account and trade assets in 26 currencies

  • IBKR pays up to 4.58% interest on cash balances of $10k or more

Up to 4.58% interest on balance*

What are AI ETFs?

Artificial intelligence has had several breakthroughs in recent years and delivered powerful and disruptive software like Midjourney, ChatGPT, and Google Bard. Many of them drastically affected how people perceive AI, with various experts announcing the doorstep of artificial general intelligence – an intelligence rivaling that of a human.

In any case, companies involved in the development and integration of AI show promise with advances in automation, machine learning, and data analytics. Due to their disruptive nature, AI innovations could reshape industries across the field, so investing in them now could potentially deliver massive returns to investors in the future.

Compared with individual stocks, ETFs provide readily set batches of hand-picked companies, conveniently dealing away with numerous issues of individual stock investing, like active management effort, regular managing and monitoring, and high risk of non-diversified holdings.

5 Best AI ETFs to invest in 2024

As a result of a detailed analysis, we present to you our selection of best AI ETFs:

  • Spear Alpha ETF (Nasdaq: SPRX);
  • Roundhill Generative AI & Technology ETF (NYSE Arca: CHAT);
  • iShares U.S. Technology ETF (NYSE Arca: IYW);
  • First Trust Nasdaq Artificial Intelligence and Robotics ETF (Nasdaq: ROBT);
  • Global X Robotics & Artificial Intelligence ETF (Nasdaq: BOTZ).

Best Platform for Worldwide Stock Trading & Investing

  • Highly trusted multi-asset broker with clients in over 200 countries

  • Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)

  • Low commissions starting at $0 with no platform fees or account minimums

  • Easily fund your account and trade assets in 26 currencies

  • IBKR pays up to 4.58% interest on cash balances of $10k or more

Up to 4.58% interest on balance*

1. Spear Alpha ETF (SPRX)

Spear Alpha ETF (Nasdaq: SPRX) is an ETF that focuses on companies engaged in development and breakthrough trends in industrial technology. The ultimate aim of the fund is to search the market and spot underappreciated opportunities across various sectors, including artificial intelligence, automation and robotics, and space exploration

As one of the best AI ETFs, SPRX lists several significant AI stocks in its portfolio, including Snowflake (SNOW) – 9.27%, AMD (AMD) – 8.74%, and Nvidia (NVDA) – 8.41%.

Spear Alpha ETF price today


2. Roundhill Generative AI & Technology ETF (CHAT)

Roundhill Generative AI & Technology ETF (NYSE Arca: CHAT) is an ETF designed to provide investors with easier exposure to companies dealing with machine learning and generative artificial intelligence. Rather than following an index, it is an actively managed fund that invests in individual stocks.

It is one of the first ETFs to track the performance of companies involved in generative AI, with a portfolio of 36 companies, including Microsoft (MSFT), Baidu (BIDU), and C3.ai (AI). 

Roundhill Generative AI & Technology ETF price today


3. iShares U.S. Technology ETF (IYW)

iShares U.S. Technology ETF (NYSE Arca: IYW) is an ETF with a broader focus on American companies dealing with electronics, hardware, and IT sectors. However, a substantial portion of its portfolio is in artificial intelligence companies. Combined with its historical performance, it makes the fund one of the best AI ETFs on the market.

The iShares U.S. Technology ETF aims to track the Russell 1000 Technology RIC 22.5/45 Capped Index. Some of the top holdings in its portfolio include Apple (AAPL), Microsoft (MSFT), and Alphabet (GOOGL). 

iShares U.S. Technology ETF price today


4. First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)

First Trust Nasdaq Artificial Intelligence and Robotics ETF (Nasdaq: ROBT) is among the best AI ETFs due to its heavy involvement in AI, automation, semiconductors, and other tech stocks. 

The fund seeks to replicate the investment outcome, that is, the price and yield performance of the Nasdaq CTA Artificial Intelligence and Robotics Index. Among its 108 stocks in holdings, you can find AI-engaged companies like Splunk (SPLK) and Synopsys (SNPS).

First Trust Nasdaq Artificial Intelligence and Robotics ETF price today


5. Global X Robotics & Artificial Intelligence ETF (Nasdaq: BOTZ)

Global X Robotics & Artificial Intelligence ETF (Nasdaq: BOTZ) is a fund oriented towards stocks that have the potential to benefit from advances in robotics and artificial intelligence. Such stocks tend to belong to companies involved with industrial robotics, automation, autonomous vehicles, and non-industrial robots.

Out of its 44 stocks, some of the more prominent include Nvidia (NVDA), Intuitive Surgical (ISRG), and UiPath (PATH). 

The Global X Robotics & Artificial Intelligence ETF seeks to replicate the investment results of the price and yield performance of the Indxx Global Robotics & Artificial Intelligence Thematic Index.

Global X Robotics & Artificial Intelligence ETF price today


How to invest in AI ETFs: Step-by-step

If you want to discover the investing process in some of the best AI ETFs, follow our step-by-step guide:

Step 1: Choose a broker

Before trading AI ETFs, investors require access to the stock market first. You can simply acquire it by using a third-party investing service. The simplest and most effective option is an online brokerage.

To securely buy some of the best AI ETFs, we recommend you consider Interactive Brokers (IB):

  • Commission-free stock trading;
  • Global stock-trading on 90+ market centers;
  • Fractional shares available;
  • Extra income on fully paid shares;
  • Lowest financing rates for margin accounts in the industry;
  • No account minimum.

Best Platform for Worldwide Stock Trading & Investing

  • Highly trusted multi-asset broker with clients in over 200 countries

  • Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)

  • Low commissions starting at $0 with no platform fees or account minimums

  • Easily fund your account and trade assets in 26 currencies

  • IBKR pays up to 4.58% interest on cash balances of $10k or more

Up to 4.58% interest on balance*

For additional investment opportunities in the AI sector, consider the following guides:

Step 2: Open and fund your account

Once you decide on an investing service, you should continue by creating and verifying your account. The investing service will promptly email you the correct instructions.

The next step is to prepare to invest in AI ETFs by transferring money into your account. Commonly available funding methods include bank transfers, debit or credit cards, and transaction services like PayPal.

Step 3: Decide how much you want to invest

Knowing your budget limits before you start trading AI ETFs is paramount to your success. Restraining your spending to the budget limits should stop a potential financial disaster from occurring. To allow for a stable and safe investment, make sure you have done the following:

  • Paid off all high-interest debt, such as credit cards and personal loans;
  • Created an emergency fund that covers at least three months of daily life expenses.

Step 4: Place your order and trade AI ETFs

The next step is placing an order and conducting the trade. Go through the following: 

  • Step 1: Log into your account and select among the best AI ETF tickers;
  • Step 2: Type in the amount you wish to purchase;
  • Step 3: Select the order type (market order or limit order) and place it;
  • Step 4: Confirm the trade order.

Pros and cons of investing in AI ETFs

Pros

Pros

  • Growth potential: Investing in artificial intelligence allows you to tap into the potential of a rapidly growing sector with disruptive applications across all sectors and industries;
  • Diversification: AI ETFs commonly include a range of tech companies heavily involved in AI development, providing diversification across the sector;
  • Convenience: This selection of best AI ETFs offers a straightforward way for investors to benefit from the AI sector without the need for in-depth research on individual stocks;
  • Risk mitigation: Diversification provided by a broad AI ETF portfolio helps mitigate the risk associated with investing in individual stocks;
  • Innovation potential: AI is at the helm of global technological innovation, and investing in AI ETFs allows you to partake in and profit from that transformative journey.
Cons

Cons

  • Volatility: The technology sector, including AI, can experience bouts of volatility. Market shifts can impact the performance of AI ETFs;
  • Lack of control: Investing in an ETF means giving up control over specific stock selection. If an individual AI company outperforms others, you will not directly benefit from its success;
  • Market trends dependency: AI ETFs’ performance is bound to the overall trends in the artificial intelligence sector, which can be driven forward or brought to a halt by market sentiment and economic conditions;
  • Expense ratios: AI ETFs, like all such funds, have expense ratios, which represent the cost of managing the fund. Higher expense ratios mean less overall returns.

Common mistakes to avoid when investing in AI ETFs

Make sure to avoid these common investing mistakes:

  • Lack of research: Research artificial intelligence, trends in the technology sector, and the global state of the market in detail before investing;
  • Lack of strategy: Set your goals before you spend any money;
  • Staking everything on one asset: Always diversify your portfolio;
  • Falling prey to scams: Avoid illegal platforms and suspicious deals.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

FAQs about best AI ETFs

What is an AI ETF?

AI ETFsare exchange-traded funds with a portfolio of securities heavily involved in developing artificial intelligence and related technologies.

What are some of the best AI ETFs to invest in?

According to our research, some of the best AI ETFs to invest in right now are: Spear Alpha ETF (Nasdaq: SPRX), Roundhill Generative AI & Technology ETF (NYSE Arca: CHAT), iShares U.S. Technology ETF (NYSE Arca: IYW), First Trust Nasdaq Artificial Intelligence and Robotics ETF (Nasdaq: ROBT), and Global X Robotics & Artificial Intelligence ETF (Nasdaq: BOTZ).

How to invest in AI ETFs?

AI ETFs trade just like stocks on major exchanges. To trade some of the best AI ETFs, create an account with a reputable online brokerage like Interactive Brokers, select an AI ETF, transfer some funds to your account, and place a buy or sell order through the platform.

Is investing in AI ETFs safe?

By doing your research, making solid investing decisions, and using a regulated brokerage like Interactive Brokers, you maximize the safety and success chance of your investment.

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