Machines are taking over—and investors can profit. In settings ranging from factories to banks and hospitals, Artificial Intelligence (AI) aims to create intelligent, learning machines capable of humanlike behaviors such as visual perception, speech recognition and even decision-making. Google CEO Sundar Pichai has described AI as “more profound than…electricity or fire.” And spending on AI is expected to hit $78 billion by 2022, up from $24 billion in 2018.
Question: How to invest so you can take advantage of the growth? Because AI spans industry niches and technologies ranging from semiconductor chips that make up the brains of AI machines…to facial-recognition software…and consumer products such as semiautonomous cars, the best way to invest is to choose from more than 20 exchange-traded funds (ETFs) that focus on a variety of AI-related companies. These ETFs should be used for only the most aggressive, long-term part of your portfolio because the companies they invest in tend to be small and have hyper-volatile stock prices.
Two AI ETFs to consider now…
Global X Robotics & Artificial Intelligence ETF (BOTZ), launched in 2016, is the largest AI fund, with $1.56 billion in assets. It’s best for investors who already have exposure to US tech companies because foreign companies, especially those based in Japan, make up two-thirds of the portfolio. Examples: Fanuc, which makes robots for auto assembly lines, and Cyberdine, which makes exoskeleton medical devices. GlobalXETFs.com
iShares Robotics and Artificial Intelligence ETF (IRBO), started in June 2018, is a much smaller fund, with $39 million in assets. Its holdings are heavily focused on North American companies. Examples: Xilinx, a semiconductor company that makes programmable “logic” devices, and ATS Automation Tooling Systems. iShares.com
